Mexico to ‘step away’ from NAFTA if negotiations don’t benefit all

The Santiago Times

Mexican Foreign Minister Luis Videgaray has said that if North American Free Trade Agreement negotiations don’t benefit all parties involved, the country is willing to “step away” from it.

In an interview with Bloomberg, he said pulling out of NAFTA would be a last resort. “If what is on the table is something that is not good for Mexico, Mexico will step away from NAFTA,” Videgaray said.

“Both parties have leverage with each other. The questions is: Can you pull your leverage without hurting yourself? Probably not. We’re not approaching this in that sense. It should be a constructive process,” he added.

Videgaray said Mexico’s relationship with the United States goes beyond trade; it already affects the politics of Mexico ahead of a presidential election in which NAFTA could be a wedge issue.

Mexico will hold presidential elections in 2018. During the Videgaray said he anticipates negotiations between Mexico, Canada and the United States over NAFTA could begin in the summer.

When asked if negotiations could begin later and spill over into 2018, during Mexico’s presidential cycle, and make relations with the United States and trade a key issue, Videgaray said those issues are the reasons the Mexican and U.S. governments must work constructively.

“I think that already the U.S. relationship — the Mexico-U.S. relationship — is going to be an important part of the political environment in Mexico as we approach an election cycle,” Videgaray said.

“That’s something that goes beyond trade, is the way that Mexico feels about the U.S., and that’s why I think it’s so important to work constructively, in good faith, work closely toward getting a good understand and a good deal for both sides.

He said doing negotiating the agreement well would be a ”win-win“ for Mexico, Canada and the United States.

”It’s a clear win-win for both the U.S., Mexico and for Canada, as well, because this is a trilateral deal, and we expect formal negotiations to start at some point during summer,“ Videgaray said.

On renegotiating NAFTA, Videgaray said the Mexican government already has its list of objectives prepared, which, among others, call for the protection of Mexicans in the United States and others issues surrounding security and migration.

On trade, Videgaray said the Mexican government’s primary goal under President Enrique Peña Nieto is for the ”Free Trade Agreement to remain free trade.“

“Can it be improved? Oh, yeah. For sure. It can be improved. It’s a 20-year-old agreement and many things can be done better,” Videgaray said.

“We’ve learned a lot over these 20 years and the world has changed, but it’s got to remain a free trade agreement, where investments are protected, that investors in Mexico, and the U.S. and Canada are under the rule of law and feel protected, and also, very important, that we include things that didn’t exist when NAFTA was created like electronic commerce, or sectors from Mexican economy that [were] complete closed and now after recent reforms have been opened like energy, telecommunications and even the financial sector.”

Proposed Changes to NAFTA

Several media sources report a draft letter to Congress on potential changes to NAFTA is in circulation.  Those changes may include right to impose tariffs on Mexican, and Canadian goods.  The letter is said to take a ‘gentler tone’ than Trump initially took.   The White House must notify Congress before 90 days beginning negotiations.  The Trudeau government’s 2017 budget is cautious due to the uncertainty caused by the Trump administration.