Mexican Ambassador Asks That US Congress Not Take USMCA Hostage
Mexican Ambassador to the U.S. Martha Barcena, speaking April 22 at the Georgetown Law School conference on U.S. ratification of the new NAFTA, implored: "We need USMCA not to be taken as a political hostage. We need USMCA to be taken in its own merits." She also said, "We should not let politics stand in the way of free trade that has yielded benefits for both of our societies."
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Barcena acknowledged that speakers before her are skeptical about the deal's prospects in Congress in 2019. The most optimistic estimate of the chance of passage came from the AFL-CIO's Celeste Drake, who gave it a 33.33 percent chance. Barcena knows that Democrats in Congress are concerned that Mexico will not enforce changes to its labor laws, even once the law is passed. Barcena said that that law should pass this week. "We were going to do the labor reform with or without USMCA," she said, adding that "Mexico honors its commitments and there should be no doubt about that."
One of the challenges of implementation is that every one of Mexico's more than 700,000 labor contracts must be revised within the next four years, so that protection unions can be dismantled and workers can have the chance to freely elect their own leadership. She said technical assistance in this process "would be of extreme importance," and she said she hopes the U.S. labor movement would collaborate with the Mexican government.
Drake told Barcena that the U.S. labor movement has been told before that trading partners would enforce their domestic labor laws, and it has not happened. Barcena replied that the U.S. labor movement would never have a better partner than the current Mexican administration. She said, "Seize the opportunity!"
On an earlier panel, Drake and others talked about what would have to happen to get a ratification vote. Akin Gump's Brian Pomper, who was chief trade counsel for a Democratic majority in the Senate Finance Committee, said: "The real game is in the House. First of all, Democrats have to agree on what they want. Both within four corners of the document," and if there's another legislative priority they want to move in exchange for moving the new NAFTA. "That’s going to take some time," he said, noting that even the Democrats' demands for changes to the U.S.-Colombia trade agreement took seven months to negotiate. So, he said, the idea of getting a vote before the August recess is not realistic. He gave the U.S.-Mexico-Canada Agreement a 25 percent chance of passage this year, with the president's interest in compromising as the biggest risk factor.
Stephen Claeys of Wiley Rein was trade counsel for majority Republicans in the House Ways and Means Committee. He said that while many say the presidential campaign will become too involved in the fall for USMCA to move through the House, he disagrees, and that he thinks there could be a chance to get the deal passed in the fall. He said that at the beginning of the year, he was forecasting a 40 percent chance of passage in 2019, but now he's down to 30 percent.
There was consensus on his panel that the 10-year biologics exclusivity will have to be modified to get Democrats to support the pact. Claeys said the fact that there's a number to focus on is a good thing for resolving the hurdle. "It’s a number that can be negotiated one way or the other," he said.
Pomper said he thinks Democrats could live with seven years' exclusivity, as the Obama administration proposed scaling back U.S. law from 12 years to seven. Mexico and Canada have said they do not want to reopen the agreement to adjust the biologics provision -- even though lengthening the period is expected would cost their consumers more. Barcena reiterated that position at the Georgetown conference. But Pomper said to take their protests with a grain of salt, because that's what Colombia said, too, before its deal was reopened to resolve Democrats' concerns.
Beth Baltzan, who worked for Democrats on the Trade Subcommittee of Ways and Means, said just because you open up the agreement to take care of a few discrete provisions, "it's not a free-for-all." Still, she gave the bill just a 10 percent chance of passing in 2019.
Baltzan praised the Wyden-Brown labor enforcement proposal (see 1904050050), which imagines a regime wherein U.S. investigators visit Mexican factories and if they find labor violations, those factories' exports would not receive the tariff benefits under USMCA. Baltzan said Brown is the conscience of the Senate on labor, and she believes the House could pick up on this idea.
Barcena said she spoke with Brown about his proposal, since it is the only specific idea about better labor enforcement on the table. She summarized their discussion this way:
"Perfect we will agree, we will assume the U.S. will let Mexican inspectors see if the tomato growers in Florida are complying with U.S. labor law, particularly the rights of undocumented workers?" She said Brown said of course not, and she said she replied, "And what makes you think Mexico will accept a unilateral provision like this?"
Barcena also took a question from the audience about the Florida tomato growers' complaint to the Commerce Department that Mexican tomato producers are dumping their products. She said she doesn't know if a negotiated solution will be found before May 7, the date the current suspension agreement is to be lifted, but she said that Commerce officials said the latest proposal from Mexican industry (see 1904100022) is a good foundation to build on to negotiate a new suspension agreement to the antidumping case. "I think I can be cautiously optimistic that a solution will be found," she said.