Mexico Congress backs motion defending NAFTA dispute mechanism

MEXICO CITY (Reuters) - Mexico's Congress backed a non-binding motion on Wednesday urging the government to reject the Trump administration's proposal to scrap the Chapter 19 dispute settlement mechanism in the renegotiation of the North American Free Trade Agreement. The motion was backed across party lines in the permanent committee of Congress, which convenes while the full legislative body is in recess. The summer recess of Congress ends at the end of August. Under Chapter 19, binational panels hear complaints about illegal subsidies and dumping and then issue binding decisions. The United States has frequently lost such cases. The mechanism has hindered the United States from pursuing anti-dumping and anti-subsidy cases against Mexican and Canadian firms, and the country's neighbors have expressed reservations about eliminating it from a new trade agreement. On Tuesday, Canadian Prime Minister Justin Trudeau said a fair dispute resolution system was essential for any trade pact that the country signs, including a renegotiated NAFTA. Talks to revamp the accord are due to start on Aug. 16. Opposition Senator Ernesto Cordero, a former finance minister, said Mexico's negotiators would be making a grave mistake if they gave up the dispute settlement mechanism during the negotiations. "It's a unique chapter in the free trade agreements and fundamental for providing certainty to our exporters," he told the permanent committee of Congress before the vote. (Reporting by Dave Graham; Editing by Peter Cooney)