Democrats See USMCA Deal Near, Urge Mexico to Accept Compromise

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House Democrats said Wednesday that a deal on the stalled U.S.-Mexico-Canada free-trade agreement is within reach and urged Mexico to accept a compromise on labor-rights enforcement.

“We are on the 2 1/2-yard line,“ Ways and Means Chairman Richard Neal said about efforts to wrap up negotiations on the replacement for Nafta and clear the way for approval in Congress.

Mexico’s top trade negotiator, Jesus Seade, met Wednesday in Washington with his Trump administration counterpart, Robert Lighthizer, in an attempt to resolve final details.

Leaving the meeting, Seade said there were still outstanding issues and that he’d return on Thursday to continue negotiations. He pointed out that Mexico has already accepted a lot of changes as negotiators try to accommodate the demands of House Democrats who will decide whether and when Congress will vote on the trade agreement.

One of the concerns raised by Democrats includes enforcement of stricter labor standards, especially in Mexico. Seade said there were still details to be worked out, but bringing in U.S. inspectors to monitor Mexican companies was off the table.

Mexico’s Sovereignty

California Representative Jimmy Gomez, a member of the House Democrats negotiating team, said that House Speaker Nancy Pelosi and Lighthizer have offered Mexico a compromise on labor enforcement that “respects Mexico’s sovereignty.”

“If they want a deal, it is ripe now,” Gomez said. “It’s a good deal. That’s my message to the Mexicans and that’s my message to Democrats.”

While Seade ruled out U.S. inspectors in Mexican factories, he told reporters that Mexico was open to a fast-track arbitration process to address labor-rights violations. Gomez said the compromise does not involve “rogue” U.S. inspections, but that there is an element of monitoring involved to ensure compliance.

According to people briefed on the deal in Mexico, the labor proposal aims to make dispute settlement more effective. Disputes could take into account enforcement of Mexico’s overhaul to improve labor conditions, but wouldn’t allow investigators to just show up on any day to a factory unannounced, the “lone ranger” type of inspections that Seade has rejected.

On another sticking point for Mexico, the White House and Democrats suggested removing a provision guaranteeing 10 years of data protection for biologic drugs, according to people briefed on the deal. That would be a victory for both Democrats and Mexico, which had opposed including the protection in the USMCA before it was signed one year ago.

To contact the reporters on this story: Erik Wasson in Washington at ewasson@bloomberg.net;Eric Martin in Mexico City at emartin21@bloomberg.net;Josh Wingrove in Washington at jwingrove4@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, John Harney, Anna Edgerton

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