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U.S.-Mexico-Canada Agreement Hits Snags Over Labor Oversight Measures

ARI SHAPIRO, HOST:

Over the weekend, the U.S.-Mexico-Canada Agreement, which would replace NAFTA, hit a snag. Mexico's trade negotiator Jesus Seade pushed back on the deal. He had concerns that the final legislation sent to the U.S. Congress included oversight language he had not agreed to. In the initial negotiation, Mexico rejected the idea of having U.S. inspectors monitoring labor conditions in Mexican factories, so when he saw language in the final legislation calling for up to five U.S. labor attaches in Mexico, he objected, fearing they were inspectors in disguise.

Duncan Wood has been following the USMCA closely. He's director of the Wilson Center's Mexico Institute. Welcome to the program.

DUNCAN WOOD: Good afternoon.

SHAPIRO: Seade and U.S. Trade Representative Robert Lighthizer have now met. Seade spoke to the press. Lighthizer released a statement. So first off, where do things stand right now?

WOOD: Well, it's been an incredible roller coaster, this whole process, I have to say. Just when we think we've reached the finish line, there's a major setback. And it seems as though there is a major understanding between the two sides. The Mexicans believe that the labor attache portion of the agreement is just simply somebody who will be in the U.S. Embassy in Mexico City who'll be sort of monitoring what's happening in the labor environment in Mexico, whereas the language that was included in legislation here in the United States seems to suggest that they will have an inspection role, and that's something that the Mexicans have been trying to avoid all along. Now...

SHAPIRO: So is this fundamentally a misunderstanding, or is the U.S. trying to sneak something past the Mexicans?

WOOD: Well, I think that the key thing is to recognize that it's not just the U.S. There is a difference between the administration between USTR Lighthizer and...

SHAPIRO: U.S. trade representative, yeah.

WOOD: Yes, that's right. And between the Democrats in the House, because the Democrats in the House have been pushing for much tougher limitations on what Mexico can do in the labor environment, whereas USTR, although they've been pushing for stricter regulations in Mexico, they've been willing to be a little bit more flexible with their Mexican counterparts.

SHAPIRO: So what's the upshot of this news conference?

WOOD: I think it reflects the fact that Seade and Lighthizer have a friendly relationship. They have an understanding. And Lighthizer has said to Seade, don't worry about it. I give you my word that they are just going to be labor attaches in the embassy monitoring what's happening in Mexico; they will not be inspectors. And Seade is going back to Mexico feeling quite content with that. In other words, he's got the language that he needs to justify his decision to accept the deal that he got last week here in Washington.

SHAPIRO: So is it your best sense that this is back on track now?

WOOD: I think it's back on track for now. But I would raise the specter that, in fact, when push comes to shove, those labor attaches may have a much more broad role than we think they do or, rather, than the Mexicans think they do at this point in time. So I don't think that the idea of inspections has disappeared forever.

SHAPIRO: You know, Mexico signed on to this deal quickly before the U.S. and Canada, which are both still working on it. Do you think there's any concern on the Mexican side that maybe they signed on too quickly, before they had all the details hammered out?

WOOD: I think there's certainly that concern there, and in particular because, you know, this latest modification - it was just rushed through the Mexican Senate. It was approved unanimously on the understanding that the administration in Mexico had negotiated well. And now there are all of these questions there. And so I think that the administration in Mexico will be exposed to at least some questioning by the opposition down there.

SHAPIRO: What kind of track record does Mexico have on labor? Why was this so important to American parties to have some kind of oversight here?

WOOD: Well, first of all, Mexico, of course, has some very good laws, but the real problem has been in enforcing those laws on the labor front over the years. Mexico passed a major new labor reform, which was a constitutional reform, earlier on this year, which actually modernized a lot of their legislation and made it much more progressive, allowed for free elections for unions, et cetera. The real challenge...

SHAPIRO: But clearly, that wasn't enough for Democrats in Congress who said, we need more labor oversight if we're going to sign on to this.

WOOD: Well, yes, and that's because there are doubts about the willingness of the Mexican administration to actually enforce those laws and whether or not the resources are there in the government to make sure those laws are respected.

SHAPIRO: That's Duncan Wood, director of the Wilson Center's Mexico Institute.

Thanks for speaking with us today.

WOOD: My pleasure.

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