Mexico seeks to counter criticism over U.S. labour provision in trade deal

MEXICO CITY/WASHINGTON (Reuters) - The U.S. and Mexican governments on Monday sought to defuse a growing controversy over a U.S. plan to monitor Mexican labour standards under a new regional trade deal, with Mexico insisting it would have the final say over any U.S. officials appointed for that purpose.

Mexico, the United States and Canada on Tuesday agreed revised terms for the United States-Mexico-Canada Agreement (USMCA), the deal due to replace the 1994 North American Free Trade Agreement (NAFTA) which underpins commerce in the region.

That same day, the U.S. Congress set out how the United States planned to send attaches south to monitor application of Mexican labour laws, which Democratic lawmakers worry are too lax and encourage companies to invest in lower-cost Mexico.

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However, at the weekend the Mexican government publicly raised objections to that plan.

Speaking at a news conference, Mexican Foreign Minister Marcelo Ebrard said the spat would not put the USMCA at risk, and that it would be up to Mexico whether to give accreditation to the proposed labour attaches on its territory.

“The attaches are authorized by Mexico,” Ebrard told reporters. “No country can assign attaches in Mexico but us.”

Critics see the labour provision as the latest in a string of concessions granted by the administration of President Andres Manuel Lopez Obrador to his U.S. counterpart Donald Trump following earlier agreements on migration and security.

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An annex for implementing USMCA presented in the U.S. House of Representatives on Friday envisaged designating up to five U.S. experts to monitor compliance with a Mexican labour reform.

The labour annex drew criticism from Jesus Seade, the Mexican official in charge of USMCA talks, who said it was not part of the accord signed by the three countries last week and that he would raise the matter in Washington this week.

U.S. Trade Representative Robert Lighthizer, who met with Seade in Washington on Monday, reassured him in a letter that the use of attaches was a common practice, and that these officials would abide by Mexican law.

“These personnel will not be ’labour inspectors’ and will abide by all relevant Mexican laws,” he said in the letter, which was released by his office.

He added that any “good faith questions about whether workers at a particular facility are being denied labour rights” would be investigated by an independent, three-person panel chosen by both parties, not the labour attaches.

The row is the latest outbreak of tensions over trade in North America triggered by Trump’s decision to renegotiate NAFTA after he took office in 2017.

Concerns about the future of the North American trading arrangements have cast a shadow over the economy of Mexico, which sends about 80% of its exports to the United States.

Trump has worked to leverage Mexico’s dependence on its northern neighbour to push Lopez Obrador into tightening Mexico’s borders and accepting migrants seeking asylum in the United States while their cases are heard in U.S. courts.

Nevertheless, Mexico’s peso dipped below 19 to the dollar during trading on Monday, reaching its strongest level against the greenback in more than five months.

(Reporting by Noe Torres and Julia Love in Mexico City and Susan Heavey in Washington; Writing by Dave Graham; Editing by Frank Jack Daniel and Alistair Bell)

This story has not been edited by Firstpost staff and is generated by auto-feed.