December 9, 2019

Mexico Reportedly Agrees To United States’ Proposed Changes To USMCA

Over the past ten days, U.S. Trade Representative Robert Lighthizer has met several times with Mexican and Canadian officials to review proposals developed by the Office of the U.S. Trade Representative and House Democrats to address Democrats’ concerns about the labor enforcement provisions in the United States-Mexico-Canada Agreement (USMCA), and whether inspectors from the United States should be allowed to check for labor violations at Mexican factories.

Early last week, Mexico’s leaders suggested they might be willing to walk away from the USMCA rather than agree to Democrats’ demands, but on Sunday evening Politico reported the United States and Mexico had reached an agreement that would allow the pact to move toward ratification in the U.S. Congress. The news outlet cautioned, “The two sides are still working out the final details …”

According to Reuters, U.S. Trade Representative Robert Lighthizer also asked Mexico to agree to a last-minute demand to restrict the definition of what would constitute North American steel and aluminum under automotive rules of origin, calling for the metals to be “melted and poured” only in North America. Mexican officials reportedly agreed to the rule if it would not be enforced for at least five years. They did not accept the tighter rule for aluminum since the country does not produce the metal’s raw materials.

Despite the contentious atmosphere earlier in the week, House Speaker Nancy Pelosi (D-Calif.) maintained an optimistic stance, saying she still thinks the House will vote on the trade deal before Congress adjourns this year. For that to happen, however, the speaker said Democrats need “language with enforcement in it.” At press time for Connecting the Dots, that language had not yet been released.

Given the limited number of legislative days remaining in December that would allow a USMCA vote this year, the details will have to be hammered out quickly. If not, the debate over ratification in the U.S. Congress would spill over to 2020. Constituent engagement will be important to getting the trade deal ratified in the coming days.

MSCI members can use this link to contact U.S. lawmakers to ask them to pass the USMCA.

For additional information, you can find MSCI’s priorities for an updated trade agreement between Canada, Mexico, and the United States in our June 2017 comments to the Office of the U.S. Trade Representative.