For the first time since NAFTA renegotiation talks began two Mexican business groups have suggested that Mexico may have to leave the negotiating table in the face of unfavorable proposals being pushed by the United States.
The president of the Business Coordinating Council (CCE), Juan Pablo Castañón, and his National Agricultural Council (CNA) counterpart, Bosco de la Vega, both believe that if aspects of the new deal sought by the U.S. remain unreasonable, abandoning the 23-year-old North American Free Trade Agreement would be Mexico’s only viable option.
“There is a possibility that we will leave the table. The cause is that we cannot comply with what the partners are asking of us in circumstances that are no longer a reality in Mexico,” Castañón said.
The CCE head said that Mexico should instead seek opportunities in other parts of the world, especially South America.
Grain currently imported from the United States and Canada could be brought from South America, he argued, adding that greater ties with Europe will make technologies needed by small and medium-sized businesses easier to access.
Castañón also talked up Mexico’s existing industries, simultaneously downplaying any perceived dependence on its northern neighbor. An aerospace industry as well as several others with technology-based production already exist and Mexico is the world’s fifth largest automotive exporter and 12th largest agri-food producer, he said.
“We live in a very different reality compared to that of 25 years ago,” he added.
The CNA president also strongly criticized the United States’ tougher stance.
He described its posturing at the third round of talks held last week in Ottawa, Canada, as an “attack” on Mexico, citing proposals for the textile and agricultural industries as the biggest sticking points.
“They don’t want exports from Mexico when they have [their own] output so they’re going to put up trade barriers, which is an unacceptable situation,” de la Vega said.
In that context, he said, the CNA would prefer a dignified exit from the agreement and instead wait until both Canada and the U.S. have new leaders before negotiating a new pact. World Trade Organization rules would fill the void in the interim.
The next big test of the negotiations is just a week away when the three parties return to Washington for the fourth of seven scheduled rounds of talks.
The director of GMCA — a strategic consultancy that specializes in the agriculture sector — believes that Mexico has the opportunity to launch a counter-attack on a U.S. proposal regarding seasonal products with one or both of two available “weapons.”
Juan Carlos Anaya said that the first is to seek the support of Canada, which also opposes the proposal, in order to stymie the U.S. on the issue while the second is to apply seasonal tariffs on agricultural products entering Mexico from the United States.
Some of the United States’ largest export products to Mexico, including red apples, chicken, pork and powdered milk, could all be targets of new barriers, Anaya said.
But Economy Secretary Ildefonso Guajardo looks set to argue to try to keep agricultural markets as open as possible before considering a tit-for-tat approach.
“We believe that the [seasonal] proposal is damaging for both nations,” he said at the conclusion of last week’s talks.
“It opens a door to unstitch advances in the integration of the North American agricultural market.”
The CNA, along with other affected parties, lays the blame for the United States’ tough stance squarely on the shoulders of the president, yet remains defiant in the face of his repeated threats to withdraw from the deal if it’s not renegotiated to his liking.
“A man like United States President Donald Trump can’t destroy what has been built by generations,” de la Vega said.
“It’s not an issue that is at the whim of just one person . . . .”