UPDATE 2-Mexico expects U.S. Congress to start formal trade deal approval soon

Mexico expects U.S. lawmakers to soon begin the process of approving a new trade deal between the two countries and Canada now that President Andres Manuel Lopez Obrador has promised wage increases and funding for labor reforms, a senior Mexican official said on Friday. The United States-Mexico-Canada Agreement (USMCA) must win approval in a divided U.S. Congress where Republicans control the Senate and Democrats the House of Representatives. While Republicans back the agreement negotiated by President Donald Trump, Democrats led by House Speaker Nancy Pelosi have expressed concerns about its labor and enforcement provisions.

Trump continued on Friday to rail against "do-nothing Democrats" for failing to pass the trade agreement. "We need USMCA passed. It's a great deal for our country, for our farmers, manufacturers, unions," he told reporters. "I appreciate Republicans are just outraged and the American public is outraged that the do-nothing Democrats are doing nothing."

Republican lawmakers have accused Pelosi and the Democrats of stalling work on the trade deal to avoid handing a victory to Trump, but Democrats say they are working closely with the U.S. Trade Representative's office to get their concerns addressed. The USMCA, which would replace the $1 trillion North American Free Trade Agreement (NAFTA), risks getting bogged down in the 2020 U.S. presidential election race if U.S. lawmakers do not ratify it soon.

"The progress made in dialogue with Speaker Pelosi and U.S. lawmakers and negotiators makes us think that the end to this complex story is near, that soon we will see the United States initiate the formal process of approval of the trade deal," Mexico's deputy foreign minister for North America, Jesus Seade, said at Lopez Obrador's daily news conference. The Mexican president has promised wage hikes and other labor provisions in a campaign to convince U.S. Democratic lawmakers to ratify USMCA.

"I think we're getting there," Seade said when asked if Mexico's push to convince U.S. lawmakers about its commitment to implementing the labor reforms was working. In a letter addressed to Pelosi, Lopez Obrador called for ratification "soon" so as to avoid having the electoral process in the United States "impede or delay" the deal's finalization.

The agreement was negotiated last year after Trump said the existing NAFTA deal was unfavorable to U.S. workers and businesses.

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