Mexico Says Progress Made in USMCA Talks, Drug Protections to Ease

December 6, 2019 Updated: December 6, 2019

Progress is being made towards reaching a deal in the U.S.-Mexico-Canada trade agreement (USMCA) that will sharply reduce protections for biologic drugs, in what will be a setback for U.S. pharmaceutical companies, Mexico’s government said on Dec. 4.

The USMCA is a new North American trade pact approved by Mexico this year, but Democratic lawmakers have held up U.S. ratification urging the Trump administration to make several changes regarding steps on the drug protections.

Mexico’s top USMCA negotiator, Deputy Foreign Minister Jesus Seade, told reporters he spoke with U.S. Trade Representative Robert Lighthizer in Washington for nearly four hours, after which he felt steps had been made towards reaching a deal.

However, he added, their talks would continue on Thursday as “there are things we can’t accept,” but said he hoped a deal could be reached in the coming days.

Democrats have been negotiating the terms of President Donald Trump’s replacement for the the 1994 North American Free Trade Agreement (NAFTA), for the past several months, with House Speaker Nancy Pelosi (D-Calif.) resisting calls in recent weeks to bring the deal to the House floor for a vote, saying the measure doesn’t have strong enough worker and environmental protections.

At the heart of discussions are U.S. efforts to subject Mexico to tougher controls of its labor standards.

Democrats have pressed to get stricter enforcement of new Mexican labor rules enshrined in the deal by proposing that inspectors supervise their implementation, which Mexico has firmly rejected.

Kenneth Smith, who was Mexico’s principal USMCA negotiator from 2017 to 2018, told Reuters that Democrats were pressing to eliminate biologic protections for drugmakers.

The news comes after Sen. Chuck Grassley (R-Iowa), the President Pro Tempore, on Monday said the agreement won’t pass this year unless a deal is reached this week.

“I’ve come to the floor many times to speak with my colleagues about the U.S.-Mexico trade agreement. I recently spoke with my colleagues in the House of Representatives and also officials within the administration about the same subject. By all accounts, the deal is close,” Grassley said on the Senate floor.

“I urge House Democrats to act quickly and be reasonable so that we can finally deliver certainty on this issue to the American people. It has now been more than a year since the leaders of Canada, Mexico, and the United States signed the agreement. So Americans have waited a year for what can happen now to happen.

Grassley said the deal would create hundreds of thousands of new jobs and boost wages but warned the deal’s conclusion would likely be delayed into next year if it wasn’t ratified by the end of the week.

“The end of this year’s legislative session is rapidly approaching, as we all know. If a deal cannot be reached by the end of this week, I do not see how the USMCA can be ratified in the year we’re in. As it is, the window of opportunity for 2019 is extremely tight. Now is the time for the Democrat-controlled House of Representatives to act so we can act now in the United States Senate,” he said.

Sen. John Cornyn (R-Texas) also called for the House to pass the USMCA.

Reuters and Zachary Stieber contributed to this report.