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MEXICO CITY, Oct. 1-- Negotiations to modernize the North American Free Trade Agreement (NAFTA) will become thornier as talks progress, Mexico's Senate said in a report released on Sunday. As NAFTA members Mexico, the United States and Canada begin to tackle the more contentious issues, and the demand for concessions grows in order to preserve the two-decade trade deal, the negotiations will turn complex, lawmakers said. Following the end of the third round of talks in Ottawa, "the negotiation will become increasingly more complicated," with the three partners delving into the details in some 12 trade areas, the report said. One of the toughest issues for Mexico will be labor regulations, the Senate noted. Canada and the U.S are demanding Mexico raise workers' wages to bring them more in line with North American standards. But Mexico is so far refusing to budge, since low pay is one of its industry's major competitive advantages over its two partners. Canada's biggest private sector union has weighed in on the issue, saying that if Mexico doesn't improve its labor standards, NAFTA should be ditched. Mexico has been arguing that labor rights are a domestic matter. "Mexico made clear its position to not give in to the demands of its partners in the sense of including binding commitments in the matter of labor policy in the text of the treaty," senators said, in a statement no doubt designed to reassure the business sector. | 
