USMCA: Mexico was blindsided by labor enforcement provision proposed by the U.S. Congress

The language used in the U.S. bill would allow the U.S. to deploy up to 5 full-time diplomats to Mexico

USMCA: Mexico was blindsided by labor enforcement provision proposed by the U.S. Congress
On December, Canadian, U.S., and Mexican officials signed the new trade deal in Mexico City - Photo: Francisco Cañedo/Xinhua
English 15/12/2019 14:05 Newsroom & Agencies Mexico City Reuters Actualizada 16:00

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On Saturday, Jesús Seade, Mexico’s Deputy Foreign Minister, sent a letter to top U.S. trade officials, expressing surprise and concern over a labor enforcement provision proposed by a U.S. congressional committee.

On December 10, top officials from Mexico, Canada, and the United States signed a new version of the trade deal, aiming to improve the enforcement of worker rights and hold biologic drugs prices down by eliminating a patent provision.

Nevertheless, how labor disputes are handled in the new United States-Mexico-Canada Agreement (USMCA) trade deal was one of the most complicated parts of the negotiations between the three countries.

Mexico, the U.S., and Canada sign USMCA trade agreement

After intense negotiations among U.S. Democrats, the Trump administration, and Mexico produced more rigorous rules on labor rights, which are aimed at reducing Mexico’s low-wage advantage. However, an annex for the implementation of the treaty that was presented in the U.S. House of Representatives on Friday, which proposes the designation of up to five U.S. experts who would monitor the implementation of the new labor reform in Mexico.

“This provision, the result of political decisions by Congress and the Administration in the United States, was not, for obvious reasons, consulted with Mexico,” Seade wrote in the letter. “And, of course, we disagree.”

The letter was released on December 14th but is dated on December 13th and addressed to U.S. Trade Representative Robert Lighthizer. Seade said he would travel to Washington on Sunday to directly discuss the issue with Lighthizer and lawmakers.

“Unlike the rest of the provisions that are clearly within the internal scope of the United States, the provision referred to does have effects with respect to our country and therefore, should have been consulted,” Seade wrote.

The new USMCA: labor controls and tariffs

Both Canada and the U.S. House Ways and Means Committee said the USMCA included a mechanism to verify that Mexican companies comply with union rights at factories. Said inspection would be carried out by independent labor experts.

Nevertheless, some Mexican business groups criticized the lack of clarity and conflicting information on how the rules would be enforced under the deal.

According to Seade, the language used in the U.S. bill would allow the U.S. government to deploy full-time diplomats to Mexico, to make sure that the country is enforcing the new labor laws.

A few minutes ago, Seade took to Twitter to explain the situation. On a long thread, he explained all the benefits Mexico obtained from the new trade deal and acknowledged that the U.S. Congress proposed a provision but emphasized that this is not part of the USMCA, instead, it is a U.S.' Implementation Law. Seade added that this was a unilateral decision and that Mexico would not accept five labor inspectors who disguise themselves as diplomats in Mexico

The USMCA was signed over a year ago to replace the North American Free Trade Agreement (NAFTA), but Democrats, who control the U.S. House of Representatives, insisted on major changes to labor and environmental laws before passing it.

Mexico rejects U.S. labor demands on USMCA

UPDATE

On December 16th, Seade and Lighthizer met for a 1 1/2 hour meeting in Washington. After the meeting, Robert Lighthizer released a letter where he emphasized that the diplomats the U.S. will deploy in Mexico are not "labor inspectors” and that they will abide by Mexicans laws

Seade then held a press conference where he emphasized what is contained in Lighthizer's letter.

Seade then added that the diplomats will help Mexico to implement its new labor reforms but will not be inspectors.

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