MEXICO CITY (AP) — Mexico’s Senate voted overwhelmingly Wednesday to ratify a new free trade agreement with the United States and Canada, making it the first of the three countries to gain legislative approval.
Mexico’s upper chamber voted 114 to four with three abstentions in favor of the U.S.-Mexico-Canada Agreement, or USMCA. It will replace the North American Free Trade Agreement which U.S. President Donald Trump had threatened to withdraw from the United States did not get a better deal.
Mexican President Andrés Manuel López Obrador said in a recorded message that the vote was “very good news.”
“It means foreign investment in Mexico, it means jobs in Mexico, it means guaranteeing trade of the merchandise that we produce in the United States,” he said.
The United States is by far Mexico’s biggest export market and there was little opposition in the legislature to the deal. The approval came after Trump vowed to impose tariffs on all Mexican goods if López Obrador didn’t reduce the flow of U.S.-bound illegal immigration from Central America.
Mexico’s economy ministry in a statement said that with Senate approval “Mexico sends a clear message in favor of an open economy and of deepening its economic integration in the region.”
U.S. Trade Representative Robert Lighthizer in a statement applauded Mexico’s ratification as “a crucial step forward.”
The treaty is still awaiting consideration by lawmakers in the United States and Canada.
Ratification of the deal still faces some opposition in the Democrat-controlled U.S. House of Representatives.
Mexican lawmakers had already executed a series of labor reforms that the U.S. had demanded.
Sen. Ricardo Monreal, leader of the governing party in the Senate, said the vote was “an important step to diminish the existing uncertainty for North American trade.”
On May 30, the same day that Mexico’s government formally presented the USMCA agreement to its Senate, Trump announced via Twitter that he would begin imposing escalating tariffs on all Mexican imports unless Mexico slowed the flow of Central American migrants to their shared border. Days of negotiations averted the tariffs and Mexico is implementing measures to lower the number of migrants crossing its territory.
Mexico’s peso rose moderately against the dollar to 19.03 Wednesday, though the main factor was the U.S. Federal Reserve signaling that it was prepared to cut interest rates if needed to protect the U.S. economy, according to Gabriela Siller, economic analysis director at Banco BASE.