Mexico Ratifies Trade Deal With the U.S. and Canada – The New York Times

MEXICO CITY — The Mexican Senate approved a new North American trade agreement on Wednesday, making Mexico the first country to ratify a deal that President Trump has touted as his signature trade achievement.

“Mexico takes the lead, with clear signals that our economy is open,” Jesús Seade, Mexico’s top trade negotiator, wrote on Twitter, celebrating the Senate’s approval of the bill. “We trust that our partners will soon do the same thing in the interest of a strong North America, with clear rules, that is stable, competitive and attractive for investment.”

The accord, known as the United States Mexico Canada Agreement, was signed late last year by the leaders of the three countries. For it to go into effect, it has to be approved by the legislatures of all three countries.

The path to approval has been bumpiest in Washington, where Democrats in Congress have raised concerns over Mexico’s enforcement of labor rights and environmental law — and smoothest in Mexico, where the president has described the accord as a guarantee of stability for his country’s economy.

The enthusiasm of President Andrés Manuel López Obrador of Mexico for the agreement marks a sharp reversal of his longstanding opposition to free trade and a surprising turnaround for a politician who has railed against Mexico’s free market policies in the past.

The new agreement updates the 25-year-old North American Free Trade Agreement, which has brought the Mexican and American economies closer and made Mexican factories a crucial part of American production lines.

Mexico surpassed Canada to become the United States’ largest trading partner and the largest market for American goods earlier this year. About $1.7 billion in goods cross the United States-Mexico border daily in both directions.

Luis de la Calle, a former Mexican trade negotiator, said the importance of that trading relationship explained the change in Mr. López Obrador’s attitude.

“Integration is here to stay,” Mr. de la Calle said. “There are structural reasons as to why the United States and Mexico are integrated. Reversing Nafta would have a tremendous cost.”

Mr. López Obrador sent the agreement to the Senate at the end of May, urging the chamber, which his left-wing party controls, to approve the deal.

“We think it suits us, that it is beneficial for more foreign investment,” Mr. López Obrador said then during his morning news conference, adding that the new trade accord would help create more well-paying jobs in Mexico.

Passage through the Senate was the final step for Mexico to approve the deal. For the treaty to be valid, after all three legislatures approve it, all three leaders must sign a proclamation putting it into effect, Mr. de la Calle said.

The Canadian government has introduced legislation on the accord in Parliament, where the government of Prime Minister Justin Trudeau has a majority and it is expected to be ratified.

Chrystia Freeland, Canada’s foreign minister, told reporters in Washington last week that Canada intended to move “in tandem” with the United States in passing the legislation.

“We think of it as a kind of Goldilocks approach,” she said. “We’re not going to go too fast, we’re not going to go too slow.”

Mr. Trudeau planned to meet with Mr. Trump in Washington on Thursday, and is expected to express his desire to ratify the accord in tandem with the United States, according to senior Canadian officials.

But in the United States, Democrats have pushed back the Trump administration’s efforts to introduce the pact for a vote this summer. And House Republicans who support the accord will most likely need the help of two dozen Democrats to pass the bill.

In addition to the Democrats’ concerns about the deal’s labor and environmental provisions, they have criticized protections for pharmaceutical companies that they say could prevent future legislative efforts to make drugs cheaper in the United States.

“I know the White House is eager to finish a new Nafta,” Bill Pascrell, a Democratic congressman from New Jersey, said in a hearing Tuesday. “They’re trying to drive this thing across the finish line at 100 m.p.h.”

However, he added, “if Congress can’t look over every inch, we’re not giving the green light.”

Robert Lighthizer, Mr. Trump’s top trade adviser, who testified before the House on Wednesday, rebuffed assertions that the Trump administration was rushing. He also tried to strike a conciliatory tone, saying that he was eager to sit down with Democrats to discuss what they need to support the bill.

“I’m going to do what is necessary to satisfy those members on things that I think are legitimate,” Mr. Lighthizer said, adding that he agreed with “99 percent” of their comments.

Any delay in ratifying the new pact would prolong uncertainty for businesses around North America, costing jobs and economic growth, he said.

Despite Mr. López Obrador’s desire to see the accord take effect, Mexico’s close trade relationship with the United States has also left the country acutely vulnerable to Mr. Trump’s volatile approach to trade and his willingness to use the threat of tariffs to get the restrictive immigration policies he wants.

Throughout Mr. Trump’s time in office, Mexico has been regularly buffeted by his demands.

Mr. Trump ran against Nafta during the 2016 campaign, threatening to tear up the deal before relenting and demanding a new trade agreement instead. As negotiations dragged on, though, he imposed tariffs on steel and aluminum imports from Canada and Mexico, among other countries.

Despite the duties, Mr. Trump, Prime Minister Trudeau of Canada and Mr. López Obrador’s predecessor, Enrique Peña Nieto, signed the revised North American trade deal at the end of November.

The steel and aluminum tariffs, as well as retaliatory tariffs imposed by Mexico and Canada, were lifted last month.

But the truce was short-lived. Mr. Trump threatened to begin imposing duties on all imports from Mexico if it did not act to halt the flow of migrant families.

Mexico secured a 45-day reprieve from those potentially crippling tariffs and has begun to crack down on the migrants, most of whom are fleeing poverty and violence in Central America. A new security force, the National Guard, and military troops have begun arriving at Mexico’s border with Guatemala.

The López Obrador government is determined to prevent a trade war with the United States. Foreign Minister Marcelo Ebrard said last week that the duties could lead to an “economic crisis” that would knock 1 percent off growth and cost Mexico 1.2 million jobs.