USMCA Approval Hinges on Mexico’s Labor Law, Democrats Say

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A group of House Democrats who visited Mexico City on Tuesday said U.S. approval of the stalled U.S.-Mexico-Canada trade agreement hinges on Mexico’s full implementation of a new labor law.

The five Democratic lawmakers met with Mexican President Andrés Manuel López Obrador amid intensifying talks with President Donald Trump’s administration on getting congressional approval in the coming weeks for the accord known as USMCA.

“Our meeting with President López Obrador shed further light on the Mexican government’s desire and intentions to carry out its labor justice reform, but the United States needs to see those assurances put into action,” Richard Neal, the Massachusetts representative leading USMCA discussions, said in a statement after talks with

Democrats want to see that proposed cuts to the Mexican labor department’s budget won’t affect factory inspections. They also have raised concerns about court challenges to the law, a process that could take years.

Neal said he is “eager to see Mexico demonstrate its commitment to implementing the changes necessary to realize its own vision for reform and meet the demanding labor and enforcement standards that will be required by the renegotiated NAFTA,” the North American Free Trade Agreement.

Democrats and the White House are moving closer to a deal on USMCA despite the impeachment inquiry into Trump. The two sides are working to improve enforcement of the treaty by using arbitration to resolve disputes, though they haven’t resolved penalties to address violations of new labor requirements.

‘Path to Yes’

House Speaker Nancy Pelosi has said Democrats want to be on a “path to yes” on USMCA and that the party is able to conduct legislative business regardless of the impeachment investigation. Trump has expressed doubt that Democrats can approve the trade pact during the impeachment focus, but his Trade Representative Robert Lighthizer has said he hopes it can be done.

Mexico’s Foreign Minister Marcelo Ebrard told reporters his country is “reasonably optimistic” Tuesday’s gathering will help move the U.S. Congress toward approval of USMCA, according to a recording of the conversation sent by his office.

“They were hoping to approve the accord, but didn’t understand well how the labor reform would be implemented in Mexico,” said Ebrard. “Then they had concerns about court injunctions” in Mexico against improvements, he added. He said the Mexican officials gave assurances that they realize the importance of raising wages and improving labor conditions in their country.

Lopez Obrador sent a letter to Pelosi saying he hoped USMCA wouldn’t be postponed for too long, because it’s important for investment in both countries. Last week, Mexican Undersecretary of Foreign Relations Jesus Seade told reporters in Washington that Mexico wants to see a vote by early November so the deal isn’t further delayed by the U.S. election next year.

To contact the reporters on this story: Erik Wasson in Washington at ewasson@bloomberg.net;Nacha Cattan in Mexico City at ncattan@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Laurie Asséo

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