By Anthony Harrup and William Mauldin
MEXICO CITY -- Mexico's Senate overwhelmingly voted for a broad
rewrite of trade rules between the United States, Canada and Mexico
-- making the nation the first of the three partners to ratify the
pact designed to replace the North American Free Trade
Agreement.
Senators voted 114-4 with three abstentions on Wednesday to
ratify the accord -- rebranded as the U.S.-Mexico-Canada Agreement,
or USMCA -- which was signed last November by the heads of state of
the three countries. Easy passage of the trade pact by the Mexican
lawmakers was widely expected.
"Mexico takes the lead, with clear signs that ours is an open,
market economy," Mexico's deputy foreign minister and chief trade
negotiator for North America, Jesús Seade, tweeted following the
vote. "We trust our partners will soon do the same for the sake of
a strong North America, with clear rules, attractive for
investment, stable and competitive."
President Trump praised Mexico for ratifying the pact, adding in
a tweet: "Time for Congress to do the same here!"
U.S. Trade Representative Robert Lighthizer called Mexico's
ratification of the agreement a "crucial step forward."
Mexican approval was welcomed at a time when its economy is in a
sharp slowdown.
"Today's ratification of the USMCA by Mexico's Senate is another
meaningful step in modernizing this critical trade agreement," said
Citigroup Latin America chief executive Jane Fraser. "We applaud
the Mexican government for advancing the process and we encourage
the legislatures in the U.S. and Canada to finish the
ratification."
Both Canada and Mexico began the process of seeking legislative
approval of the pact in late May after settling a dispute with the
U.S. over steel and aluminum tariffs. Although, the pact's biggest
hurdles are expected to come from the U.S. Congress.
The Trump administration, meanwhile, has faced headwinds in
getting the U.S. House, controlled by Democrats, to agree on moving
ahead with the agreement.
House Speaker Nancy Pelosi (D., Calif.) has expressed concerns
about the deal and, first and foremost, is seeking assurances that
new labor rules will be enforced in Mexico -- so cheaper labor
costs won't prompt companies to transfer U.S. jobs south of the
border.
"All of this is too important to rush," Rep. Richard Neal (D.,
Mass.), chairman of the House committee that oversees trade, said
in a hearing Wednesday with Mr. Lighthizer.
To comply with labor provisions in the new trade deal, Mexico
earlier this year passed landmark legislation that empowers labor
unions to bargain more effectively on behalf of workers and gives
workers the right to elect union leaders in direct elections with
secret ballots, among other pro-labor changes.
Mr. Lighthizer, backed by U.S. business groups, has sought to
hammer out a deal with Congress quickly -- one which could allow
some changes to North American trade policy through the U.S.
legislation that implements the trade pact. But he added that he
doesn't think the text of the agreement with Canada and Mexico
needs to be altered.
"Getting this done sooner rather than later is in everybody's
interest," Mr. Lighthizer told lawmakers.
Canada hasn't indicated when it expects to vote on ratification,
although Prime Minister Justin Trudeau has said it would be in
conjunction with the U.S. Mr. Trudeau will discuss the USMCA when
he meets with President Trump at the White House on Thursday.
International treaties signed by the executive branch only need
Senate approval in Mexico.
Mexico pressed ahead with the ratification despite the U.S.
threat of imposing tariffs on all imports from Mexico if its
southern neighbor didn't do enough to curb the flow of migrants
crossing Mexico to the U.S. border.
Mr. Trump announced the tariff threat on May 30, the same day
that Mexican government officials delivered the USMCA text to the
Senate.
Mexican President Andrés Manuel López Obrador dispatched a
delegation to Washington the next day. After a frantic week of
meetings in the U.S. capital, an agreement was reached putting off
the tariffs while Mexico took measures to reduce the number of
mostly Central American migrants passing through the Latin American
nation to the U.S.
Mr. López Obrador insists he wants to avoid confrontation with
the U.S., and has stressed the importance of the trade deal to
Mexico, which sends 80% of its exports to the U.S.
Mr. Trump has praised Mexico's crackdown on the passage of
undocumented migrants, but has also kept open the possibility of
applying tariffs in the future if he's not satisfied with the
results of the Mexican measures."
The trade pact could "encourage greater investment and help
promote growth in the coming years" for Mexico, said Jonathan
Terluk, a trade and economic policy analyst at the Empra political
risk consultancy in Mexico City.
But he added, "Threats from Trump continue to generate
significant concerns this area."
Telis Demos contributed to this article.
Write to Anthony Harrup at anthony.harrup@wsj.com and William
Mauldin at william.mauldin@wsj.com
(END) Dow Jones Newswires
June 19, 2019 20:14 ET (00:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.