Mexico first to ratify free trade deal

Mexico took the monumental first step and ratified a deal to protect one of the largest zero-tariff trading blocs in the world between the United States, Canada and Mexico.

On Wednesday, the Mexican Senate voted overwhelmingly, 114-4, to adopt the new free trade pact, called the United States Mexico Canada Agreement (USMCA). The USMCA will replace the 25-year-old North American Free Trade Agreement, NAFTA.

“USMCA passes! Mexico goes first with clear signal that our economy is open,” Mexico’s undersecretary for foreign affairs, Jesús Seade, tweeted in Spanish after the vote. “We trust that our partners will soon do the same in the interests of a strong North America, with clear rules, attractive for investment, stable and competitive.”

Arizona Chamber of Commerce and Industry President and CEO Glenn Hamer heralded the news in a tweet as well.

“Tariff news that Senate in Mexico has ratified #USMCA. The US Congress must act. Best trade deal the US has ever negotiated.”

Now, businesses and elected officials are urging the United States and Canada to follow suit.

The clock is ticking. At stake: a powerful partnership that enjoyed $1.4 trillion in trade among them last year.

One down, two to go 

Chambers of commerce, trade groups, community leaders, companies and economists are urging the U.S. and Canada to quickly follow suit.

“The ratification process is critical to provide that stability that companies are looking for that are planning investments in North America,” said Luis Ramirez, president and CEO of Ramirez Advisors Inter-National, LLC, in Phoenix, which specializes in cross border initiatives and governmental affairs. 

Arizona Gov. Doug Ducey and Sonora Gov. Claudia Pavlovich dispatched letters to the federal government urging ratification.

The USMCA will “bring benefits to both our countries, and help Arizona and Sonora reach our full potential,” the two border governors said in the joint letter.

Last year, two-way trade between Arizona and Mexico increased 7.7 percent to $16.6 billion. The USMCA will take those numbers “to the “next level,” they said.

Canada ready to roll  

Canada also is expected to ratify the deal with minimal fuss. Canada has already introduced the bill in Parliament and is waiting to see what the U.S. will do.

Prime Minister Justin Trudeau is expected to meet with House Speaker Nancy Pelosi (D-Calif.) in Washington today to encourage U.S. passage, according to national news outlets.

House Democrats are not prepared to advance a bill in their chamber, however. During hearings with America’s top trade representative, Robert Lighthizer, in both houses this week, Democrats said they want stronger provisions for enforcement of new labor reforms in Mexico and environmental protections.

Lighthizer said he’s willing to make concessions to get the USMCA ratified in the coming weeks.

Mexico leads the way

Mexico’s vote on Wednesday came a week after President Donald Trump threatened to upend the deal. Frustrated with migrant caravans streaming north, Trump said he would impose 5 percent trade taxes on all imports from Mexico on June 10 if the country does not slow the flow.

Mexico’s popular new president, Andrés Manuel López Obrador, immediately sent a delegation to Washington D.C. to address the matter head-on.

Mexico promised to send 6,000 more troops to border areas to stem the flow. Trump backed down.

By overwhelmingly approving the USMCA on Wednesday, the country is sending another “strong message” about its commitment to the deal, cross border trade expert Ramirez said.

“In essence, Mexico has stepped ahead and now we’re waiting on the U.S. and Canada.”

To read more about the hearings in Congress this week, go to U.S. trade representative talks trade.