Monday, June 24, 2024

Economy secretary urges flexibility from Mexico’s NAFTA partners

The economy secretary said today that the three NAFTA partners need to show flexibility to reach an updated trade pact, while U.S. Trade Representative Robert Lighthizer expressed optimism that a breakthrough on a new deal was close.

Speaking to reporters this morning after a meeting with United States officials in Washington, Ildefonso Guajardo said it wasn’t possible to guarantee that the new North American Free Trade Agreement will be made before the end of the month.

He explained that after four weeks of consecutive talks with Lighthizer, the two countries still haven’t reached consensus on all outstanding issues, meaning that bringing Canada back into the talks is still premature.

“My view is that there are problems between Mexico and the United States that have to be resolved, then we can have a trilateral meeting,” Guajardo said.

Lighthizer, however, was more upbeat when questioned about the progress of the talks by United States President Donald Trump during a cabinet meeting at the White House today.

“I’m hopeful that in the next several days we’ll have a breakthrough,” he said, although he added there are still some significant issues to deal with.

Trump himself said there was “no rush” to conclude the talks.

Trump’s comment contrasts with a letter he sent to president-elect Andrés Manuel López Obrador last month, in which he wrote that a successful renegotiation of NAFTA would lead to more jobs and higher wages in both the United States and Mexico “but only if it can go quickly.”

The U.S. president also repeated today his mantra that NAFTA had been a “disaster” for the United States.

“We have much better alternatives than that. So if you can’t make the right deal, don’t make it,” Trump told Lighthizer.

Referring to the same meeting, White House economic adviser Larry Kudlow told broadcaster NBC that Lighthizer was “getting close” to making a deal and described the official as “a little more optimistic than I’ve seen him in many moons.”

Following his comments, the Mexican peso immediately strengthened 0.8% against the dollar to 18.96.

Among the contentious issues that Mexico and the United States have been working to resolve over the past month are revamped rules for the automotive sector and a so-called sunset clause that would see the trilateral trade agreement automatically expire after five years if it is not renegotiated.

At the conclusion of talks today, Guajardo said they would continue tomorrow but the sunset provision would be among the “very last items” to be considered.

Today is the first anniversary of the start of the trilateral talks to update the 24-year-old agreement.

Trump’s repeated threats to terminate the deal, his suggestion that separate accords with Mexico and Canada could be pursued and the United States’ imposition of metal tariffs on both its neighbors have all complicated the renegotiation process.

Nevertheless, Mexico and Canada have consistently said they are committed to reaching a trilateral agreement that is beneficial to all countries.

Source: Reuters (sp), Milenio (sp), NBC News (en)

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