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Mexico asks Pelosi to act on N America trade deal, business groups wary

The proposed change related to how steel is identified as North American, a key part of USMCA aimed at keeping more industries such as vehicle manufacturing in the region

Reuters  |  Mexico City 

The cost of freight movement by road is ~2.58 per ton-kilometre, compared with ~1.41 per ton-km for rail and Rs 1.06 per ton-km for waterways
Representative image

Mexican President Andres Manuel Lopez Obrador on Monday urged US House Speaker to decide on ratification of a North American trade pact, even as Mexican business groups fretted that proposed changes were weakening the deal.

Lopez Obrador's comments came amid increasing signs the Trump administration, Mexico and Democrats in the House of Representatives were nearing an agreement for changes that can allow the US-Mexico-Canada Agreement to proceed to a vote in the US Congress.

"It's time, it's the moment," Lopez Obrador said during his regular morning news conference, adding that time was running short to avoid ratification of the deal spilling into next year's US presidential election.

He said Mexican senators had agreed to changes hammered out in recent weeks to satisfy US Democrats' demands for increased labour and environmental enforcement in the deal, which was struck more than a year ago but must be ratified by legislators in the three countries before it goes into effect.

Despite the government's urgency, business groups warned that some of the concessions could hurt Mexican industry, including a tougher labour regime offered to appease Democrats and tighter rules on the origin of steel, proposed by the US government over the weekend.

"We are not in a hurry to approve modifications that contradict the original agreements," employers confederation Coparmex said in a statement, adding it wanted greater consultation with the government before more ground was ceded.

Mexican Foreign Minister Marcelo Ebrard said on Sunday that the country would accept the new US demand on steel, which could affect what steel is defined as Mexican, if the rule took effect at least five years after the trade pact's ratification.

The proposed change related to how steel is identified as North American, a key part of USMCA aimed at keeping more industries such as vehicle manufacturing in the region.

Mexico's association of bus and truck makers said it feared such a change would raise costs in the supply chain.

"In principle, it is a measure that does not promote the competitiveness of the automotive vehicle industry," Miguel Elizalde, the group's executive president, told Reuters.

Eduardo Solis, president of Mexican auto industry association AMIA, said that as long as the steel industry was given enough time to adapt to any changes, his group will be content.

Lopez Obrador stressed on Monday that Mexico was waiting on the United States to make the next move.

"We think we have already defined the terms in which we can ratify the agreement" he said.

First Published: Tue, December 10 2019. 02:12 IST
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