Mexican Negotiator Says U.S. Trade Deal Still Needs Work

Eric Martin and Shelly Hagan

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Mexico’s negotiator for a trade agreement with the U.S. and Canada said there’s more work to do before the deal can be finalized and win approval in U.S. Congress, increasing the odds that the debate may drag into next year.

Remaining differences focus on enforcement of labor standards, dispute settlement, biologic drugs and environmental rules, Jesus Seade, Mexico’s deputy foreign minister, said on Friday following meetings with Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland.

An agreement could still happen as soon as next week, with ratification before the end of the year, Seade said. But he cautioned that he needs to confer with President Andres Manuel Lopez Obrador and Mexico’s private sector before signing off on changes.

“If there’s nothing that goes beyond the red lines that we have drawn, then we can come back within a few days and say ‘fine,’” Seade told reporters in Ottawa. “As the Democrats have correctly said a hundred times, we also say it’s more important to get the right treaty than a quick treaty.”

The three countries are running out of time to make final tweaks to the U.S.-Mexico-Canada Agreement, or USMCA, to get it through U.S. Congress before legislative debate risks getting overwhelmed by the 2020 presidential campaign.

Seade also met with U.S. Trade Representative Robert Lighthizer in Washington on Wednesday. President Donald Trump’s administration and House Democrats have been locked in tense negotiations for months to try to secure a potential vote before the end of the year.

Even if a deal is sealed, the House is not expected to vote on it immediately, and it only has about two weeks left in session before breaking for the Christmas recess. A House vote looks more likely when members return in January, with the Senate following.

There are a number of procedural hurdles before the agreement can come to the floor for a vote, including committee hearings and review of the implementing bill in the House Ways and Means and Senate Finance committees. Those steps could be waived to save time, though.

Enforcement of labor issues remains a final sticking point in the talks. Mexico has said that it rejects a Democratic proposal to put U.S. labor inspectors in its factories, calling it a violation of sovereignty, a position that Seade reiterated on Friday.

“The main red line that we have drawn so many times that it’s no longer a red line but an engraving on the floor is that we would not accept these lone ranger inspectors being called where voom! -- twelve hours later they dash to see a factory whether there’s a sin being committed,” Seade said. He added that Mexico supports allowing for labor conditions to be evaluated through the dispute settlement system.

(Updates with comments in fourth paragraph.)

To contact the reporters on this story: Eric Martin in Mexico City at emartin21@bloomberg.net;Shelly Hagan in ottawa at shagan9@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Matthew Bristow, Walter Brandimarte

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