The new trade treaty between Mexico, the United States and Canada (USMCA) could be ratified later this year in both chambers of the U.S. Congress and in the Canadian Parliament, predicted Carlos Salazar, president of the Mexican Business Coordinating Council (CCE).
The representative of the Mexican business leadership explained that, after legislative approvals, the heads of the three countries could sign during the first quarter of next year the new Treaty of Mexico, United States and Canada (USMCA), preliminarily agreed on November 30, 2018.
“Then, on the side of the executive power of the three countries this has been approved and the only thing we need now is the formality once it passes through Congress. The most important part today is that it goes through the two missing congresses,” Salazar said at a press conference.
The CCE’s forecast comes after the announcement of Nancy Pelosi, president of the U.S. House of Representatives, who said last Thursday that she “would like” the Lower House to approve the trade agreement this year.
Salazar said Pelosi, leader of the Democrats, agreed with his party’s congressmen that ratification “can already move forward,” although doubts persist about “enforcement” (law enforcement) in Mexico, something that Jesus Seade, Mexican Undersecretary for North America, is already working on.
“This enforcement will be oriented in an individual way. To companies that have a problem, will seek what happens to the company, not the sector. Today we are usually accused of the entire sector and companies that do not have problems are subject to a problem. That is the only chapter that remains to be resolved,” he said.
The business leader said that the doubts of U.S. legislators about labor reform in Mexico, one of the main demands of the Democrats, “were resolved” in his last visit.
Dismissing pressure from the Mexican Secretariat of Labor, the representative of the CCE said they are willing to work with the authorities to support the review of collective agreements and the installation of courts of conciliation and labor arbitration, provided for in the labor reform approved in April.
In any case, Salazar denied a possible “catastrophic consequence” of not ratifying the agreement in the time contemplated, because the North American Free Trade Agreement (NAFTA), which entered into force in 1994, is still in force.
“What interests us is that it be signed so that those uncertainties of someone who wants to come and invest in the country, with a long-term vision, are resolved. So, this is the only situation that can affect us, that some investments continue to be stopped, but they would not be all of them,” he said.
The representative of the private sector argued that the ratification of the USMCA, added to the infrastructure plan that will be announced together with President Andrés Manuel López Obrador next week, are “two good news” for the country’s economy.
Despite denying that GDP growth will reach a level of 4% for next year, as the Mexican government has proposed, Salazar predicted that these two factors could lead to a growth of 2%, as contemplated in the Federal Expenditure Budget (PEF), which is now being discussed in Congress.
“These two situations, in our opinion, are milestones that can explain a change in the growth trend for next year,” he said.