Democrats, Mexicans Far Apart on Enforcement Proposals

Democrats in the House insisted that their ideas about how to verify compliance with Mexico's labor laws is a balanced one that respects their sovereignty. Chief Mexican negotiator on USMCA, Jesus Seade, wrote a column published Dec. 4 that said, in Spanish, that there will be no “transnational inspectors,” even though the U.S. has pushed so much for that approach. "If the U.S. stops insisting on the pair of unacceptable ideas that the [Mexican trade group CCE] statement yesterday speaks of, we can soon have a treaty, and a very good treaty," he wrote (see 1912030033). He said that the state-to-state dispute settlement system, broken in NAFTA, "will now be 100% repaired, for all topics and sectors under the treaty."

He met with U.S. Trade Representative Robert Lighthizer all day on Dec. 4 in Washington. In describing the negotiation up to that point, he said, "This has been like a long pregnancy, it is progressing, although with frequent pains and even vomiting. Childbirth will always be the most difficult, but I trust that we will get through it, with an end result that, if we arrive in port, will be very good for Mexico."

Rep. Gregory Meeks, D-N.Y., a co-chairman of the trade task force for the pro-trade New Democrats, said the opposition from Mexican business interests to the Democrats' proposals to strengthen enforcement shows exactly why it's needed. He said during a hallway interview that if Mexican negotiators do reject some of the proposals, "then we could hit a snag. That's why we are insisting it's in. And I think Canada would be with us. And I think ultimately Mexico would have to give on that."

House Majority Leader Steny Hoyer, D-Md., in response to a question from International Trade Today, said that he didn't want to address what it would mean for ratification if Mexico holds its ground on inspections at the factory level. "I think Mexico wants to get this deal done, as Canada does, as we do. I hope they do [agree] and I hope we get this done in the near term, before we leave here" Dec. 20, he said.

It's not just Democrats who say the inspection approach is a reasonable one. The top Republican on the House Ways and Means Committee, Rep. Kevin Brady, R-Texas, who wants a vote in the House this year, said at a press conference Dec. 4 that it's important that this get agreed to in the next few days, and said USTR has found a balance of reassuring Democrats who support labor unions that Mexico will get its reforms done in a timely manner and doing so in a way that respects Mexico's sovereignty. "I'm convinced they have a higher stake in implementing their labor laws than they do," he said, and he hopes Mexican negotiators see that what the USMCA might create would give them "the room to implement that." He said the U.S. should increase funding at USTR and Commerce to support this, as well as coordinate with Canada to support efforts inside Mexico.

"We're getting dangerously close to the line where we can't" get the ratification done this year, he said. "At some point, you've got to put the pens down."

New Democrat Rep. Ron Kind, D-Wis., said during a hallway interview, "Quite frankly, we're waiting for Mexico sign off right now." He added, "We were always anticipating that Mexico Chamber of Commerce might balk at a lot of the labor reforms we are asking for, and that AMLO's government is willing to do. It's not surprising that at the 11th hour they're pushing back on it. But I can't imagine at the end of the day, Mexico's going to turn around and walk away from this."

House Ways and Means Committee member Rep. Dan Kildee, D-Mich., believes NAFTA was destructive. He said that in the House Democratic caucus Dec. 4, Speaker Nancy Pelosi pointed out that "if the Mexican business interests don't like it, by implication, you know, it's stronger" than NAFTA.

Working group member Jimmy Gomez, D-Calif., also said that Mexican pushback is expected, but said that there's very little room for Americans to modify their proposal, which he said Mexicans have mischance as American inspectors stomping in.

"There's no rogue inspectors. I think it is balanced in its approach. The Mexicans, hopefully they come to a realization that this is a happy middle ground," Gomez said. When asked by ITT whether the inspectors could be from Mexican civil society, to avoid the sensitivity of Americans telling Mexicans they're not following their laws, Gomez expressed disbelief. "Have you been to Mexico? Civil society is something that develops over time." Gomez is of Mexican descent, and said he has been to Mexico dozens of times. "The Mexicans should realize that the Democrats are pretty firm in our resolve to get something that's actually enforceable," he said. "In my opinion, they should come to the conclusion quickly that what has been discussed between Democrats and USTR is reasonable. If not, I'm not sure where the new USMCA will end up."

He said his message to Democratic skeptics is the same as what he's saying to Mexican negotiators: "I think people from all sides need to realize this is as good as it's going to get, and everybody should swallow what they don't like and be happy with what they do like."

Working group member Rep. John Larson, D-Conn., who is close with leadership, said there could be flexibility on who does the inspections if people were certain the inspectors were independent. He acknowledged that Mexico is sensitive over issues of sovereignty since there was once an invasion of Mexico by American soldiers.

Dan Ujczo, a partner at Dickinson Wright and a close NAFTA watcher, said "inspectors may be a red line." But he said there could be ways to cross it -- perhaps an initial phase whereby the three countries decide whether inspectors should deploy, and allowing the inspectors' report to be confidential. What the remedy would be if the factory is violating the law, of course, is thorny.

While some, like Kildee, say there is no urgency to vote in December or January, Gomez disagrees. "People should understand time does run out," he said, saying he means both the White House and the Mexicans should understand that. "And if they want a deal, I think it's ripe. Now. And that would be my message."