Mexico rejects US demand for trade deal 'supervisors'

Mexico City (AFP) –


Mexican President Andres Manuel Lopez Obrador said Tuesday he would not accept a US proposal for supervisors to oversee the implementation of Mexico's labor reforms under the countries' new trade deal.

Mexico's promised labor reforms have become a key sticking point in ratifying the United States-Mexico-Canada Agreement (USMCA), with US lawmakers insisting on better enforcement mechanisms to level the playing field between Mexican and American workers.

Washington has reportedly proposed an addendum to the deal under which US inspectors would verify Mexico's compliance with its commitments to increase wages and union power, as well as a dispute resolution panel for labor issues.

Lopez Obrador delivered a firm "no" on the former, but said he was open to the latter.

"They are proposing a sort of supervisory process on Mexico's compliance with its (new labor) law. We won't accept that," the leftist leader told his daily news conference.

"We said inspectors, no, dispute resolution via so-called panels, yes."

His comments came a day after Mexico's top business group, the Business Coordinating Council (CCE), said some of the new US labor proposals were "extreme and totally unacceptable."

Mexico is the only country so far to ratify the new deal, negotiated at US President Donald Trump's behest to replace the 25-year-old North American Free Trade Agreement (NAFTA), which he considers "a disaster" for the United States.

In a bid to comply with its commitments under the new deal, which was signed in November 2018, Mexico has raised its minimum wage and passed labor reforms to give unions more power and workers more say in running them.

But US labor groups and opposition Democrats in the House of Representatives have voiced skepticism over the Mexican government's ability to enforce the new rules.

That has led to a drawn-out ratification process in the United States, where the trade deal now risks getting mixed up in Trump's ongoing impeachment drama and electoral politics heading into his 2020 re-election campaign.

Canada has said it will ratify the deal in tandem with the US.