Mexico will pull out of NAFTA talks if United States President Donald Trump initiates the process of withdrawing from the trade agreement while discussions are still ongoing, the foreign affairs secretary warned yesterday.
In Washington yesterday, Luis Videgaray responded with a categorical “No” when questioned by reporters if Mexico would continue to negotiate if President Trump initiated the withdrawal process.
“We believe that the negotiation already has a process, we’re already in a renegotiation, it’s a constructive renegotiation,” Videgaray said after meeting with his U.S. counterpart, Rex Tillerson.
Videgaray traveled to Washington with Economy Secretary Ildefonso Guajardo to hold talks on the North American Free Trade Agreement and other bilateral issues before the second round of renegotiations commences tomorrow in Mexico City.
Videgaray said he and Guajardo had agreed with U.S. Commerce Secretary Wilbur Ross and Trade Representative Robert Lighthizer to continue a “serious” renegotiation of the agreement.
Speculation that the U.S. will pull out of the accord, signed 23 years ago with Mexico and Canada, has heightened this week after Trump posted on Twitter Sunday describing NAFTA as “the worst trade deal ever made” and accusing both Mexico and Canada of being “very difficult.”
“May have to terminate?” he wrote.
The Foreign Affairs Secretariat responded by saying that Mexico would not conduct trade negotiations through social networks while Videgaray last week described Trump’s tough talk and expressions of pessimism as a “negotiating strategy.”
Trump subsequently reiterated his threat to end the agreement at a White House press conference on Monday and in a speech in Missouri yesterday during which he said that “Mexico is not happy” with the way his administration is approaching the renegotiation and referred to the agreement as “the horrible, terrible NAFTA deal.”
“Hopefully we can renegotiate it, but if we can’t, we’ll terminate it and start all over again with a real deal,” Trump told factory workers in Springfield.
A clause in the 23-year-old agreement allows withdrawal after giving 180 days’ notice. However, some experts say that Trump would need the approval of Congress before he could pull out.
Ildefonso Guajardo told the newspaper El Economista this week that “there is a risk, and it’s high” that the Trump administration would ditch NAFTA. He also announced that Mexico is preparing a plan B in case renegotiations break down.
The second round of talks starting tomorrow is expected to focus initially on areas of consensus before turning to more contentious issues including rules of origin and the dispute settlement mechanism for resolving illegal subsidies and dumping complaints.
The U.S. is also expected to pursue ways to reduce its multibillion-dollar trade deficit with Mexico.
Still, Videgaray remains optimistic that a positive outcome for the three countries can be achieved and said that whether Mexico decides to leave the negotiating table remains to be seen.
“If the result of the negotiations is not beneficial for Mexico of course Mexico will not continue but we believe we can have a good negotiation for Mexico and for the other parties. We’re not there yet.”