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U.S. Business Mexico becomes first country to ratify USMCA trade deal

Mexico on Wednesday became the first country to ratify the United States-Mexico-Canada Agreement (USMCA) agreed late last year to replace the North American free-trade agreement (NAFTA) at the behest of U.S. President Donald Trump.

By a vote of 114 in favour to four against, Mexico’s Senate backed the trade deal tortuously negotiated between 2017 and 2018 after Mr. Trump repeatedly threatened to withdraw from NAFTA if he could not get a better trade deal for the United States.

Mexican President Andres Manuel Lopez Obrador had said the deal would be ratified this week in the Senate, where his leftist National Regeneration Movement (MORENA) and its allies have a comfortable majority in the 128-member chamber.

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There has been little parliamentary opposition in Mexico to trying to safeguard market access to United States, by far Mexico’s most important export market, and the deal received support from nearly all the opposition lawmakers who voted.

Mexico sends around 80 per cent of its exports to the United States, and Mr. Trump has vowed to impose tariffs on all Mexican goods if Mr. Lopez Obrador does not reduce the flow of U.S.-bound illegal immigration from Central America.

Canada, which has also fought with Mr. Trump over trade, is pressing ahead to ratify the deal. The main question mark hanging over its ratification is in the United States, where Democratic lawmakers have threatened to block the process.

Earlier on Wednesday, U.S. Trade Representative Robert Lighthizer said he believed Democrats’ concerns on enforcing labour and environmental provisions in USMCA can be sorted out quickly. He spoke just hours after Democratic Leader Nancy Pelosi said she still has many concerns over USMCA.

Mr. Trump, who had excoriated the 25-year-old NAFTA as a “disaster” for U.S. workers, wants to claim a first major trade deal victory as the campaign for the 2020 presidential election begins. The Republican formally opened his re-election campaign in Florida on Tuesday and two dozen Democrats are competing for the party’s nomination to run against Mr. Trump.

Mr. Trump, Canadian Prime Minister Justin Trudeau and Mexico’s previous president Enrique Pena Nieto signed USMCA on Nov. 30, 2018, after months of often acrimonious talks stretching back to the American president’s first few days in office.

Mr. Lopez Obrador took office on Dec. 1, 2018.

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Three of the four Mexican votes against the deal came from MORENA senators, as did one abstention. The other vote against the deal was from an independent senator, while two members of the centre-right National Action Party (PAN) also abstained.

Seven senators were not present for the vote.

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