The U.S. and Mexico are working on adding a side deal to the U.S.-Mexico-Canada Agreement on trade to address Democrats’ concerns over the deal’s dispute resolution systems, a top Mexican official said.
“There is a gap in the dispute resolution system. We are trying to find a way to plug that gap,” Mexican Deputy Foreign Minister Jesús Seade told Reuters in an interview published Friday. He said that talks were underway with the U.S. Trade Representative’s Office.
Mexico was not willing to reopen the USMCA deal to further negotiations, Seade said, but it would agree to additional side-deals clarifying the text. USMCA would replace the 1993 North American Free Trade Agreement.
Specifically, this would involve language to ensure that if the U.S. wanted to initiate an official complaint that Mexico had violated the deal’s language on labor standards it could do so. Democrats have long complained that the provisions in NAFTA relating to labor standards were not part of the trade agreement itself and were instead related to a side-agreement that isn’t effectively enforced.
Sen. Ron Wyden, D-Oregon, said in a May letter to U.S. Trade Representative Robert Lighthizer, said that USMCA largely retained NAFTA’s dispute settlement language, and this would allow countries to block attempts to purse settlements by preventing the creation of the panels that investigate the claims.
“Initially several disputes were fully litigated between NAFTA’s parties, but no case has been resolved through NAFTA’s dispute settlement system since the United States blocked a panel in a case brought by Mexico in 2001,” Wyden said.
Democrats, including House Speaker Nancy Pelosi, D-California., have previously argued that addressing such issues required that the administration to reopen talks with Mexico and Canada.
In recent weeks, however, Democrat have signaled they will settle for less than that. Rep. Earl Blumenauer, D-Oregon, who chairs the Ways and Means subcommittee for trade, told reporters late last month, “It doesn’t have to be a renegotiation of the agreement by the three countries … So, no I don’t think we are talking about starting from scratch.”
A spokesman for Pelosi could not be reached for comment. A spokesman told Reuters, “The speaker continues to work with her caucus and the USTR to strengthen these critical areas of the proposed agreement.”
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