Negotiations on the stalled U.S.-Mexico-Canada free-trade agreement reached a crucial phase on Saturday as the Trump administration sent House Speaker Nancy Pelosi a proposal for changes to the deal for review.
The plan was worked out during marathon talks this week between U.S. Trade Representative Robert Lighthizer and top Mexican negotiator Jesus Seade in Washington, according to people familiar with the talks.
Seade left Lighthizer’s office Saturday about midday and told reporters he plans to return to Mexico before traveling back to Washington for more talks on Monday.
On Friday night, Seade told reporters he was optimistic a deal can still be finalized in 2019. “I’m confident this is going to reach home, but we’re working on it,” he said.
The USMCA, a revamp of the decades-old North American Free Trade Agreement, was signed by all three nations more than a year ago. For months, the White House and House Democrats have been in talks about changes to key areas of the agreement with the aim of securing congressional passage this year.
Pelosi said Thursday that the USMCA would only be brought up for a vote when it includes strong enforcement provisions. It’s unclear how long Pelosi and her top trade negotiator, Representative Richard Neal of Massachusetts, chairman of the House Ways and Means Committee, would review the proposal.
Democrats have sought to include labor and environmental rights requirements in the Nafta replacement agreement. Mexico has resisted Democratic demands for teams of U.S. factory inspectors in Mexico, as well as a proposal to ban imports from factories found to be in violation of labor rights provisions. Seade has said, though, that Mexico can accept fast-tracked arbitration panels to hear labor rights complaints.
U.S. unions are a key player in the talks. AFL-CIO President Richard Trumka has urged Democrats in recent weeks to hold out until stronger labor provisions are secured.
A last minute hangup also emerged this week over rules governing steel and aluminum content requirements in the auto sector.
President Donald Trump said on Twitter that if Pelosi had put the deal up for a vote long ago, the U.S. economy would be doing better. “If she doesn’t move quickly, it will collapse,” Trump said. It wasn’t clear if he was referring to the trade deal or the economy.
Most economists say the USMCA will have little impact on U.S. growth, with the bigger issue now hanging over the economy being Trump’s tariffs on imports from China and the threat of a further escalation Dec. 15. The president has threatened to impose a 15% import tax on some $160 billion in imports from China including smartphones, laptops and toys if he does reach an interim deal with China.
