October 8, 2019 / 1:30 PM / 13 days ago

U.S. Democrats say Mexico must do more on labor after trip to speed up trade deal

MEXICO CITY/WASHINGTON (Reuters) - The leader of a U.S. congressional delegation to Mexico said on Tuesday that Mexico must take more concrete steps to implement its labor reform, after a trip aimed at speeding up ratification of the new North American free trade deal.

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador attends a news conference at the National Palace in Mexico City, Mexico August 30, 2019. REUTERS/Henry Romero

Mexican President Andres Manuel Lopez Obrador has vowed union freedoms, higher wages and other labor rights in his bid to assuage the concerns of U.S. congressional Democrats, who hold the key to ratifying the United States-Mexico-Canada Agreement (USMCA).

But as he concluded his visit to Mexico, Richard E. Neal, who leads the Ways and Means Committee in the United States’ lower house of Congress, suggested Democrats were still not satisfied.

“Our meeting with President Lopez Obrador shed further light on the Mexican government’s desire and intentions to carry out its labor justice reform, but the United States needs to see those assurances put into action,” Neal said in a statement.

It was unclear precisely what steps Neal would like to see.

During its time in Mexico, the U.S. delegation zeroed in on the labor reform passed by Lopez Obrador’s left-leaning government last year, examining the funding set aside to implement the law, according to the statement.

The USMCA, which would replace the $1 trillion North American Free Trade Agreement, risks getting bogged down in the 2020 U.S. presidential election race if U.S. lawmakers do not ratify it soon.

The deal was negotiated last year after U.S. President Donald Trump said the existing North American Free Trade Agreement was unfavorable to U.S workers and businesses.

Lopez Obrador called for ratification as soon as possible in his morning news conference ahead of the meeting and pledged to enforce the labor reform.

“The reform is so that ... workers can freely choose their representatives, and so there is union democracy and better wages,” he said.

After the meeting Jesus Seade, Mexico’s deputy foreign minister for North America, said he expected House Speaker Nancy Pelosi to move ahead with the USMCA by early November.

Seade has been leading negotiations with U.S. officials seeking to placate Democratic concerns about enforcement in the new deal.

Senate Finance Committee Chairman Chuck Grassley and Representative Kevin Brady, the top Republican on the House Ways and Means Committee, urged Democrats to move quickly.

“With election year politics upon us, time isn’t on our side. But the window of opportunity hasn’t closed yet. Democrats must act now,” they said in a joint statement.

Mexico’s Congress has already approved the deal. It also needs ratification from Canadian lawmakers.

Mexican Foreign Minister Marcelo Ebrard told reporters the next three weeks would be a “decisive phase” for the pact, and that officials would send U.S. lawmakers a document next week detailing the issues discussed on Tuesday, including Mexico’s labor reform.

An impeachment inquiry into Trump, which some fear could further delay passage of the USMCA, was not discussed with the delegation, Seade said. Seade has previously taken the view that the inquiry should in fact spur lawmakers to act on USMCA, and Pelosi has said it should not obstruct the deal.

U.S. trade groups on Tuesday pressed lawmakers to approve the deal and not allow the inquiry to postpone it.

Ann Wilson, chief lobbyist for the Motor & Equipment Manufacturers Association, said the industry had delayed key investments given continued uncertainty a year after the agreement was signed by the three countries’ leaders.

“We don’t have time to waste. We need to get it done,” she said.

Democrats are seeking better mechanisms in the trade agreement to ensure enforcement of labor and environmental provisions. One measure under consideration is providing aid to Mexico to beef up enforcement of labor rules.

U.S. Congressman Bill Pascrell, another member of the delegation to Mexico, suggested all sides were getting closer to an agreement.

“We’ve all got to get our act together, and we’re moving, we’re making progress,” he told Reuters after the meeting with Lopez Obrador.

Reporting by Anthony Esposito in Mexico City and Andrea Shalal in Washington; Additional reporting by Abraham Gonzalez; Writing by Daina Beth Solomon and Julia Love; Editing by Dan Grebler, Richard Chang and Richard Pullin

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