Abu Dhabi, UAEWednesday 16 October 2019

Mexico ratifies new trade deal with US, Canada

The United States-Mexico-Canada Agreement passed in the Mexican Senate with 114 votes in favour and just four against

United States Trade Representative Robert Lighthizer testifies during the Senate Finance Committee's hearing on 'The President's 2019 Trade Policy Agenda and the United States-Mexico-Canada Agreement' on Capitol Hill in Washington, DC. EPA
United States Trade Representative Robert Lighthizer testifies during the Senate Finance Committee's hearing on 'The President's 2019 Trade Policy Agenda and the United States-Mexico-Canada Agreement' on Capitol Hill in Washington, DC. EPA

Mexico has ratified the new North American trade agreement, making it the first country to give it final approval despite recent tension with the US.

The United States-Mexico-Canada Agreement passed in the Mexican Senate with 114 votes in favour and just four against, sending what the government called "a clear message in favour of an open economy and deepening economic integration in the region".

"This means foreign investment in Mexico, jobs in Mexico, access to the US market for our products," said President Andres Manuel Lopez Obrador.

There was little doubt the new deal, also called USMCA, would pass easily in Mexico, as the similar agreement it aims to replace, the North American Free Trade Agreement, has helped turn the country into an exporting powerhouse over the past 25 years.

It now falls to Canada and the US to ratify the deal.

Mr Trump congratulated his Mexican counterpart on the ratification, and called on American lawmakers to do likewise.

The deal faces a battle in the US Congress, where opposition Democrats have criticised provisions including its worker protections and dispute resolution system.

Still, US Trade Representative Robert Lighthizer said he was confident there would be progress on ratification in "the next couple of weeks".

Canadian Prime Minister Justin Trudeau was scheduled to meet Mr Trump and US Congressional leaders on Thursday to push for ratification of the trade agreement, among other issues.

In Canada, ratification looks assured.

The new deal largely resembles the original, but notably establishes new rules for the crucial auto sector, intended to boost US-made content in cars and increase wages for Mexican workers.

Tensions between the US and Mexico have been high since Mr Trump threatened last month to impose tariffs on all Mexican exports in retaliation for the number of Central American migrants arriving at the two countries' border.

Mexico managed to negotiate a reprieve from the tariffs by tightening controls at its southern border.

"If they didn't do that I would've put tariffs," Mr Trump said on Wednesday night, in a television interview with Fox News host Sean Hannity.

"And I still will if they don't – but they have been doing a really good job and people at the border will tell you that the traffic has really dropped down."

Also with respect to ratification of the new treaty, he said US Democrats "could do that in a bipartisan way".

"It means hundreds of billions of dollars to our country and thousands and thousands of jobs."

Mexico sends nearly 80 per cent of its exports to the United States, and regional free trade is broadly popular in the country.

Analysts saw Mexico's early ratification of the trade deal as a strategic move.

"Mexico wants to show good will and ratifying the USMCA quickly could help somewhat so that the debate focuses on ratification in the US," said consulting firm Eurasia Group.

Updated: June 20, 2019 05:57 PM

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