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UPDATE 1-Mexico sees U.S. Congress starting formal USMCA trade deal approval soon

Anthony Esposito

soon@ (New throughout, adds comments from Mexico's Deputy Foreign Minister, background details)

MEXICO CITY, Oct 25 (Reuters) - Mexico's Deputy Foreign Minister for North America, Jesus Seade, said on Friday he believes U.S. lawmakers will soon begin the process of approving the new United States-Mexico-Canada (USMCA) trade deal now that President Andres Manuel Lopez Obrador has vowed wage increases and funding for labor reforms.

The 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.

"The progress made in dialog 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," Seade said at Mexican President Andres Manuel Lopez Obrador's daily news conference.

Lopez Obrador has vowed wage hikes and other labor provisions in a campaign to convince 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.

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.

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" its finalization.

The deal was negotiated last year after Trump said the existing NAFTA deal was unfavorable to U.S. workers and businesses. (Reporting by Anthony Esposito, Miguel Angel Gutierrez and Sharay Angulo; Editing by David Clarke and David Gregorio)