Congress

Mexican official rejects Democratic effort to reopen new NAFTA

“Reopening it is as good as killing it,” said Jesús Seade, Mexican foreign affairs undersecretary for North America

American and Mexican flag fly over the Paso del Norte International Bridge on March 30, 2019, in El Paso, Texas. (Photo by Justin Sullivan/Getty Images)

A top Mexican official Thursday ruled out renegotiating the proposed United States-Mexico-Canada Agreement to address Democratic concerns about labor and pharmaceutical provisions.

“Reopening it is as good as killing it,” said Jesús Seade, Mexican foreign affairs undersecretary for North America.

[Trump’s border threats complicate trade pact talks]

The Mexican position rebuffs efforts by some Democrats and Speaker Nancy Pelosi who said earlier this week that parts of the agreement should be reopened to strengthen labor enforcement and address the 10-year monopoly that pharmaceutical companies would have in pricing biologic drugs.

Seade, who met with the New Democrat Coalition and the Congressional Hispanic Caucus on Thursday, told reporters later that he is working to convince U.S. lawmakers that their concerns about labor rights can be addressed without renegotiating the trade agreement. If approved by legislatures in the United States, Mexico and Canada, the trade pact would replace the 1994 North American Free Trade Agreement. or NAFTA for short.

[Trump, House Republicans meet to line up support for new NAFTA]

He said a labor overhaul package pending in the Mexican Senate contains enforcement provisions that put muscle into proposed changes designed to end company-sponsored unions and allow workers to organize their own unions. For example, he said, the package would phase out over four years so-called protection contracts of company-sponsored unions.

Seade said he expected the Mexican lawmakers to approve the labor legislation this month and implementation to begin quickly.

Seade also pointed out that President Andres Manuel López Obrador campaigned on a populist platform that included greater labor rights.

“It is the number one political priority of this president. It is the same agenda as the Democrats,” Seade said.

 

He said he thinks he made some progress is convincing Democrats there is no need to open the proposed trade agreement to address labor.

“It doesn’t mean that anyone has asked where do I sign. We had very good conversations,” he said.

Another Democratic concern about the trade agreement centers on the 10-year monopoly it would give pharmaceutical companies on pricing biologic drugs, preventing competitors from producing cheaper versions. Seade said the López Obrador government had not objected to it after joining the negotiations that were in progress between the prior Mexican government and the U.S.

[Canada and Mexico will act on new NAFTA once tariffs end, Grassley says]

Seade said his orders from López Obrador were to not open things that had been settled unless “it is an absolute disaster.”

“We respect it and we would never dream of saying let’s change it because we think reopening any aspect such as that one would be going down a very slippery slope,” Seade said. “There are many things that could be opened from the Mexican point, from the Mexican Senate point of view or in Canada actually or the U.S. I think we have a great agreement.”

However, said Seade, the continuation of America’s Section 232 tariffs on Mexican steel and aluminum could be a stumbling block for the proposed trade agreement, which the Trump administrations calls USMCA. Mexico and Canada have been negotiating with the U.S. Trade Representative’s Office to have the tariffs lifted.

“There are talks underway,″ Seade said. “From the Mexican point of view, I can tell you we would never dream of passing the USMCA unless that problem has not been resolved.” Canada has made similar statements about the tariffs.

Seade did not comment on President Donald Trump’s Thursday threat to slap tariffs on cars coming into the U.S. from Mexico if border problems with immigration and drugs were not addressed. He said he thinks a side letter to the proposed trade agreement would largely shield Mexico from car tariffs.

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