(Bloomberg) -- Mexico is offering an olive branch to U.S. Democrats after rejecting a demand they say is key to approving a new North American trade agreement.

President Andres Manuel Lopez Obrador said he’s willing to allow panels with U.S. and Mexican judges to resolve labor disputes at specific factories.

He made that promise at his morning press conference on Tuesday, when he firmly rejected requests by Democrats in the House of Representatives to allow international inspectors to enter Mexican factories to ensure they’re complying with labor laws.

Democrats are negotiating with Mexico and Canada changes to the new trade agreement known as USMCA which they consider vital for passage of the accord. USMCA has been approved by leaders of all three nations, but only Mexico’s Senate has ratified it.

“We don’t accept a kind of inspector to see that companies are carrying out what’s established in the law,” Lopez Obrador said. “What’s being proposed is that, if there’s a dispute with a company, we accept that there could be a panel, which is different, where we participate together.”

The inspectors were meant to ensure the implementation of a new Mexican law requiring that workers vote for their unions and labor contracts. Before the law was ratified in May, workers often weren’t aware that a union represented them.

To contact the reporters on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net;Lorena Rios in Mexico City at lriost@bloomberg.net

To contact the editors responsible for this story: Daniel Cancel at dcancel@bloomberg.net, ;Juan Pablo Spinetto at jspinetto@bloomberg.net, Walter Brandimarte

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