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Mexico, US seek to dispel tension over labor tweak to trade deal

Reuters | 16 December 2019

Mexico, US seek to dispel tension over labor tweak to trade deal

MEXICO CITY/WASHINGTON (Reuters) - The U.S. and Mexican governments on Monday sought to defuse a controversy over Washington’s plan to monitor Mexican labor standards under a new regional trade deal, with Mexico saying it was satisfied by U.S. assurances it was not sending inspectors.

Mexico, the United States and Canada last Tuesday agreed to revised terms for the United States-Mexico-Canada Agreement (USMCA), to replace the 1994 North American Free Trade Agreement (NAFTA).

That same day, the U.S. Congress set out how Washington planned to send attaches south to monitor application of Mexican labor laws, which Democratic lawmakers worry are too lax. Over the weekend, the Mexican government objected to the plan.

U.S. Trade Representative Robert Lighthizer met with Mexican deputy foreign minister Jesus Seade in Washington on Monday and said in a letter that use of attaches was a common practice, and that Mexican legislation would be upheld.

“These personnel will not be ‘labor inspectors’ and will abide by all relevant Mexican laws,” Lighthizer said in the letter. Asked whether the letter satisfied Mexico’s concerns, Seade told reporters in Washington: “Absolutely.”

“Ambassador Lighthizer was completely in the right... in saying sorry,” Seade said, adding that Mexican officials had not identified anything else “questionable” in the U.S. plan.

Shortly afterward, foreign ministry spokesman Roberto Velasco said in Mexico City his government had received confirmation there would be no U.S. labor inspectors.

At an earlier news conference, Mexican Foreign Minister Marcelo Ebrard said the spat would not put the USMCA at risk, and that it would be up to Mexico whether to give accreditation to proposed labor attaches on its territory.

“The attaches are authorized by Mexico,” he told reporters. “No country can assign attaches in Mexico but us.”

Critics of Mexican President Andres Manuel Lopez Obrador see the labor provision as the latest in a string of concessions granted to U.S. President Donald Trump following agreements on migration and security.

A bill for implementing USMCA presented in the U.S. House of Representatives on Friday would designate up to five U.S. experts to monitor compliance with Mexican labor reform.

A House committee expects to vote on the legislation on Tuesday, with a vote by the full House expected later in the week, according to congressional sources.

At the weekend, Seade, the Mexican official in charge of USMCA negotiations, criticized the U.S. plan to send labor experts to Mexico, saying it was not part of the accord signed by the three countries.

In his letter, Lighthizer said any “good faith questions about whether workers at a particular facility are being denied labor rights” would be investigated by an independent, three-person panel chosen by both parties, not the labor attaches.

The row is the latest outbreak of tensions over trade in North America triggered by Trump’s decision to renegotiate NAFTA after he took office in 2017.

Concerns about trade have cast a shadow over Mexico’s economy, which sends about 80% of its exports to the United States.

Trump has worked to push Lopez Obrador into tightening Mexico’s borders and accepting migrants seeking asylum in the United States while their cases are heard in U.S. courts.

Mexico’s peso MXN= on Monday strengthened to less than 19 per dollar, its strongest in more than five months.

 source: Reuters