The new trade agreement between Mexico, the United States and Canada, popularly known as USMCA, entered on Tuesday the expected final stretch for its entry into force after the three governments signed in the Mexican capital the text that includes amendments required by the U.S. Democratic Party.
The document partially modifies the agreement signed on November 30, 2018 between the leaders of Mexico, Enrique Peña Nieto of the United States, Donald Trump, and Canada, Justin Trudeau, which replaced the North American Free Trade Agreement (NAFTA), in force since 1994.
The incorporation of the latest changes put an end to more than two years of negotiations and paved the way for the Congresses of the three countries to ratify in the coming days the USMCA, which could enter into force during the first half of 2020.
THE DEMOCRATIC ENDORSEMENT
The signing on Tuesday of the new version of the USMCA would not have been possible without the support of the Democratic Party, which in recent months had blocked the ratification process of the treaty in the U.S. House of Representatives due to reluctance on labor and environmental issues.
The Speaker of the House, Democrat Nancy Pelosi, announced hours before the signing that she had reached an agreement with the White House for a new version of the commercial treaty USMCA that supposes “a victory for the workers” of her country.
“The agreement we are presenting today is infinitely better than what the Administration proposed in the first place. It’s a victory for American workers,” Pelosi said at a congressional hearing.
With this, the door was opened for the Lower House to vote next week on the agreement so that it will be approved before December 20, when the legislative activity goes into recess for the Christmas holidays.
SIGNATURE IN MEXICO
In a solemn and somewhat hasty event, representatives of the Governments of the United States and Canada traveled to Mexico City to seal the new agreement at the National Palace, the presidential headquarters.
The event was witnessed by the current president of Mexico, Andres Manuel Lopez Obrador, while the Mexican undersecretary for North America and chief negotiator of the treaty, Jesus Seade, the representative of U.S. Foreign Trade, Robert Lighthizer, and the vice prime minister of Canada, Chrystia Freeland, signed.
López Obrador, who resumed USMCA negotiation when he succeeded Peña Nieto on December 1, 2018, celebrated in his turn the consensus finally reached to close an agreement with “great dimensions” that will detonate the economy in North America.
“We are talking about an economic and commercial agreement of great dimensions. It is an agreement that helps us to promote the economic growth of our nations,” said López Obrador, who assured that “when there is investment, there is growth” and this leads to well-being and, ultimately, to “peace and tranquility.
For his part, Lighthizer thanked the Government of Mexico for having maintained a negotiation initiated by the previous Mexican Administration and said that “the result is the best trade agreement in history.
While Freeland said that the USMCA is “of critical importance to our countries” and said it is a trade agreement “updated, improved and modernized for the twenty-first century.
The ceremony was also attended by Mexican Foreign Minister Marcelo Ebrard and White House advisor and son-in-law of Donald Trump Jared Kushner, as well as Mexican ministers, legislators and businessmen.
Among other issues, the new pact requires that 75% of automobile components be manufactured in the United States, Canada and Mexico to avoid tariffs, and that 40% of parts be made by workers earning at least $16 an hour by 2023.
Undersecretary Seade, the Mexican USMCA negotiator explained during the event that the text creates tribunals made up of judges from different countries to resolve disputes, instead of sending U.S. inspectors to Mexican territory, something that had been speculated.
While Ricardo Monreal, leader of the majority in the Mexican Senate, the House that must ratify the treaty, said that the North American Development Bank will be provided with resources for the construction of environmentally friendly infrastructure.
For the Democrat, it was vital to approve a labor reform in Mexico that would establish the bases of union democracy and independent labor tribunals to resolve business disputes.