Mexico Ratifies New North American Trade Deal With United States and Canada
The new USMCA trade deal resembles the original NAFTA, which President Donald Trump calls 'the worst trade deal ever made', but is intended to boost US-made content in cars and increase wages for Mexican workers in the automobile sector.
Julio Scherer, legal adviser of the Government of Mexico, delivers the United States-Mexico-Canada Agreement (USMCA) deal to Senator Ricardo Monreal and Economy Minister Graciela Marquez at the Senate building in Mexico City, Mexico. (REUTERS/Carlos Jasso)
Mexico City: Mexico ratified the new North American trade agreement on Wednesday, making the country the first to give its final approval despite recent tension with the US.
The United States-Mexico-Canada Agreement (USMCA) passed in the Mexican Senate with 114 votes in favor and just four against, sending what the Economy ministry called "a clear message in favor of an open economy and deepening economic integration in the region."
There was little doubt the new deal would pass easily in Mexico: the one it aims to replace, the North American Free Trade Agreement (NAFTA), has helped turn the country into an exporting powerhouse over the past 25 years.
Opening debate in the upper house, Senator Veronica Martinez, secretary of the economic committee, called the deal "an important agreement for all Mexicans." "Our economy has been transformed" by regional free trade, she said.
The three countries signed the agreement on November 30 after a year of thorny negotiations triggered by US President Donald Trump's insistence on replacing NAFTA, which he calls "the worst trade deal ever made." The new deal largely resembles the original, but establishes new rules for the crucial auto sector, intended to boost US-made content in cars and increase wages for Mexican workers.
President Andres Manuel Lopez Obrador backs the deal, and the right-wing opposition had already said it would join his leftist party, Morena, in voting it through with the required two-thirds majority. The deal faces a tougher battle in the US Congress, where opposition Democrats have criticized its worker protections, dispute resolution system and other issues.
Still, US Trade Representative Robert Lighthizer said Tuesday he was confident there would be progress on ratification in "the next couple of weeks." In Canada, ratification looks assured -- though the government is waiting to move forward until the United States does.
The Mexican Senate froze committee proceedings on the USMCA last week in the wake of a standoff over Trump's threat to impose tariffs on Mexico because of the surge of Central American migrants arriving at the two countries' border.
Mexico managed to negotiate a reprieve from the tariffs -- which were due to take effect June 10 -- by tightening controls at its southern border and expanding its policy of taking back migrants as their asylum requests are processed in the US.
But some Mexican lawmakers accused the executive branch of caving to Trump's bullying, and put ratification of the USMCA on hold until Foreign Minister Marcelo Ebrard agreed to testify on the exact extent of the migration deal.
Ebrard assured Congress he had not agreed to Trump's demand for a "safe third country agreement," in which migrants arriving in Mexican territory would have to seek asylum there rather than the US. Trump has vowed to make Mexico agree to such a deal if he deems progress on the migration issue insufficient after 45 days.
After Ebrard's testimony, the Senate allowed the USMCA to move ahead. But there were barbs in the Senate over Trump's apparent willingness to blow up the countries' free-trade relationship.
"We can't go on like this.... Let's not bend over, let's not let ourselves be humiliated by threats and blackmail," said opposition Senator Antonio Garcia of the left-wing PRD party.
Still, he said he was voting for USMCA: "It's not the best deal, but it's the one we've got." Senator Gina Cruz of conservative opposition party PAN said ratifying the deal enabled Mexico to "send a clear message to the world" that "trade wars don't work."
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