Guajardo: five-year NAFTA review proposed. Guajardo: five-year NAFTA review proposed.

US withdrawal would not be devastating

Economy secretary disputes claim by US secretary of commerce

Economy Secretary Ildefonso Guajardo has rejected a claim by the United States commerce secretary that a U.S. pull-out from the North American Free Trade Agreement (NAFTA) would be devastating for the Mexican economy.

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Wilbur Ross made the claim during an interview with the Wall Street Journal CEO Council on Tuesday.

When asked whether he agreed with the comment in an interview broadcast on Televisa this morning, Guajardo replied, “No, I don’t think so.”

However, he did concede that “Mexico could face a short-term impact” if the U.S withdrew from the 23-year-old deal but added that the country’s “ability to adjust, and the manner in which we do it . . . will allow us to resist any potential change.”

Four rounds of NAFTA renegotiation talks have already taken place and officials from the United States, Canada and Mexico are meeting again in Mexico City this week. The chief negotiators from each country agreed not to attend the fifth round after meeting on the sidelines at the Asia Pacific Economic Cooperation (APEC) forum in Vietnam last week.

The renegotiation process has been characterized by clashes on contentious issues including rules of origin — especially as they apply to the automotive industry — an anti-dumping dispute resolution mechanism and labor laws.

The United States is pushing for greater U.S.-specific and NAFTA country content in order for vehicles to remain tariff-free while both U.S. President Donald Trump and Trade Representative Robert Lighthizer have stressed the need to reverse a US $64 billion trade deficit the country has with Mexico.

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Trump has also made repeated threats to leave the agreement if it cannot be renegotiated on terms that are more favorable to the U.S., while Mexico has said that if he initiated the withdrawal process, it would walk away from the negotiating table.

If the talks stretch into March 2018, Guajardo said, the United States must consider whether it wanted the renegotiation process to have an impact on Mexico’s presidential election, to be held on July 1.

Many analysts believe that continuing uncertainty surrounding NAFTA would play into the hands of left-wing Morena Party candidate Andrés Manuel López Obrador, who is currently ahead in polls and seen as the presidential aspirant most likely to stand up to the United States.

Perhaps with that in mind, Guajardo announced one partial concession to U.S. demands yesterday.

He said Mexican negotiators would recommend that NAFTA be rigorously reviewed every five years, although he pointed out that the proposal differed from the so-called sunset clause the U.S. is pushing because it would not automatically kill off the deal if agreement on an updated treaty could not be reached.

The U.S. wants NAFTA to automatically expire if renewed consensus is not reached at the end of each five-year period.

Many in the Mexican business sector believe that the U.S. proposal is bad for trade because it creates uncertainty that could undermine long-term investment and may also clash with domestic electoral processes, leading to decisions being influenced by political expediency.

Guajardo also said that Wilbur Ross’s assessment that the United States is much more important for Mexico than Mexico is for the United States is incorrect.

“I would suggest to the Secretary of Commerce that he ask our friends in Iowa how important their yellow corn or fructose sales in Mexico are, or that he ask our friends in Seattle, Washington, how important it is that Mexico is their biggest buyer of red apples, or that he ask our friends in Detroit how important Mexico is for the purchase and demand of auto parts,” he said.

Source: Reuters (en), El Economista (sp)

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  • Mike S

    If Ric Flair (aka Donald Trump) pulls out of NAFTA, builds his wall, and deports 800k “dreamers”, both countries will suffer enormously. Mexico will eventually turn to Europe, Asia, Canada, and South America to pick up the difference but that will take several years. The US has nowhere to turn to pick up the trade slack. Trump has no understanding on how much Mx and even undocumented Mexican workers helps the US economy. I hope we don’t have to find out.

    Many have tried to find a historical parallel to Donald Trump. Is it Mussolini, Andrew Jackson, Nero? Finally many historians have settled on Ric Flair:

    https://www.youtube.com/watch?v=hA0MTkHLO0g

    • TioDon

      Hahaha……if TRUMP did all those things, America would be sooooooo much better off and the 3rd world nation that is Mexico will become Venezuela…..broke. (“Nero”?? really????) TRUMP 2020

      • Mike S

        Trump….impeach no later than 2018.

        • TioDon

          but…..but…..but I thought he’d never make it 6 months…..he’d never make it a year….hahaha….TRUMP 2020….get used to it.

        • From South of the Border

          Good, Luck with that. The chances of Trump ever being impeached are less than 2% during his entire 8 years in office. Mike you are like most of the sufferers of Trump derangement syndrome you think Trump is stupid and will just give up and end up in prison. Good Luck with that. Trump understands economics a lot more than you do or Ian Chafe your fellow clueless wonder below. If a person has no economic know how how does he build towers like Trump Tower answer me that one. You see you left wing wingnuts are the actual economic illiterates. When Trump is reelected I hope you Mike and the rest of the left wing wingnuts come to San Luis Potosi and pay for my dinner at the most expensive restaurant in town, if Trump loses I’ll do the same for you, but we all know that I have nothing to worry about!! I won a similar, bet in 1984 when Reagan won reelection and a person I knew bet me a dinner that Mondale would beat Reagan and we all know how that turned out 49 states Reagan one state Mondale. I doubt you will put your money where you mouth is!!

          • Mike S

            Trump doesn’t build anything. He rents his “brand” and sets standards for the hotels he puts his name on. He hires management companies to run them and skims off fat commissions for his “brand”. He owns very few of them. If they go bankrupt, Trump leaves others holding the bag and makes plenty of money. He is a white collar gangster. Trump University sums up this silver-spoon conman who won’t release his tax returns. I’ll come up from Gdl and eat that dinner on you after November 2020, if not sooner. After the Koch brothers get their big tax breaks, the EPA destroyed, Obamacare repealed, and Medicaid/Medicare diminished- they will have no more use for him. The endless loop of the Apprentice will come to an end. White nationalism and bigotry will run out of gas.

          • From South of the Border

            Have you looked up how many buildings he does own all by himself well. Look at Wikipedia he owns 17 buildings outright including Trump Tower. He owns 17 golf courses around the world not including an additional 7 courses in the U.S. itself also, not including the Doral property in Florida which houses 5 golf courses. Then he is in partnership with other people in 12 other buildings around the world. By the way he also does have his Branding business where he has his name put on hotels, resorts and other people’s properties for an annual cut of the profits in 2015 he made 515 million dollars from that business not bad for a guy who doesn’t know what he’s doing. By the way that is about half of what he earned in 2015 with another 490 million from rentals and money from his golf courses. I’d say that a person who can make a little over a billion dollars in a year knows what he’s doing in business! By the way, if I were him I wouldn’t release my tax returns either no one else’s business except him and the IRS.
            By the way your welcome to come up at anytime and eat humble pie as he continues to outclass all of the left wingnuts in Washington. By the way when you do come and eat humble pie bring plenty of money you’ll be paying for multiple doggie bags and maybe after 3 bottles of wine I’ll order one bottle unopened to take home! I’d say $200 plus dollars should do it. Remember you agreed to this proposal and I will make sure people know, if you chicken out!!

          • Mike S

            Actually, nobody knows exactly what Trump owns because he won’t release his tax returns. He claims his net worth is $11 billion; Bloomberg estimates it at under $4 billion. If he had put all his inheritances in an indexed mutual fund, he would be worth more than $4 billion today without lifting a little finger. Trump owes lots of money- he calls himself the “king of debt”. He owes the Chinese National Bank $400 million and god knows how much to Putin’s gangster cronie billionaires. Money is his god and his vision for America is a lot like Russia. He wants full employment and low wages and a plutocracy running the country. He stiffs subcontractors all the time. He owns lots of properties but doesn’t build much, He increases his wealth conning and suing people. He is an ostentatious narcissist who got where he is blowing his racist dog whistle and pathologically lying to the gullible.

          • Mike S
    • David Nichols

      Mike S.
      You’re whistling past the graveyard if you think Mexico can find another supplier of yellow corn and fructose at competitive prices with the USA…
      The same goes for red apples, and in addition to trying to match the USA price, good luck finding a supplier that can match the quality…
      As to selling Mexican auto parts…to whom..?? China and other Asian countries can, and will, undercut any price Mexico could produce parts for–why would they buy from Mexico?
      This public statement, by a politician, is just so much hot air–machismo wrapped in a cloak of negotiation…

      • Mike S

        Mexico used to have a prolific truck farming corn industry before Monsanto invented Roundup and their prolific GMO corn seeds and flooded the Mx market driving them out of business. US taxpayers also have subsidized large corporate corn farming for years. Between renewed domestic production and imports from Brazil, Mx will be just fine in a couple years. Mx would be a lot better off with less fructose consumption. Mx can easily sell car parts to Europe, Canada, and Japan. Both countries will have a lot to lose, but the US more. NAFTA as an economic zone is able to compete successfully with Europe and Asia. Mess that up and Asia and Eurozone will eat us for lunch. After Trump’s embarrassing Asia tour, he needs to change his logo to “Make China Great” and “Make Japan Great Again”.

        • Ian Chafe

          I suggest not arguing with people who haven’t a clue about economics, much like Trump himself who has a degree from U of PA in economics (his only degree). Free market capitalism as devised by Adam Smith and as it operates in the world requires free markets, period. The idea that somehow they have to be fair is so anti-free market capitalism it is absurd. These threats about the essential nature of the US in all this also belies total ignorance of free market economics. Even the poorly educated Senator Ted Cruz understands that much. Trump, of course, is not a free market capitalist. It is quite likely he will bring about much higher unemployment in the US. US employers cannot find people who will do manual labor and other dirty jobs (lazy Americans) nor can US employers in technology find Americans with enough education (or intelligence?) to do the difficult engineering, mathematical, and scientific work. Once the latter people are unavailable, tech companies will be forced to leave the US. And note that coders are the ditch diggers of technology. For my own company, which I sold twenty years ago to retire at 50, it was almost impossible to find real-time programmers. It is worse now. Computer programmers often cannot read a core dump in hex as they cannot make the simple transition between hexadecimal and binary. And in terms of abstract thinking necessary for technology development, any sort of programming is bottom level. Worse, many simple jobs go unfilled in the US because they cannot find candidates who can pass drug tests.

        • David Nichols

          Well Mike, Mexico imported 92.4 million metric tons of US corn last year, and with a record crop Brazil exported (worldwide) 30 million metric tons…
          If my math skills haven’t deserted me that would mean that if Mexico could somehow corral all of Brazil’s corn exports, they would still have a shortfall of 62.4 million metric tons without US corn…
          I’m not saying both countries wouldn’t be hurt by abandoning NAFTA, but to suggest that the biggest loser economically would be the USA is simply not true…
          Worldwide demand for grains of all kinds is growing exponentially, due to population growth and the USA will always have more demand than supply for human and livestock food grains…
          Without NAFTA Mexico will have to compete on the world market to buy what they cannot grow…

    • From South of the Border

      Mike, It is breath taking how uninformed and how you tip your hand about how left of center you really are! Do you really think the U.S. can’t live without Mexico REALLY!! I would give Mexico this advice tell your people that you won the negotiations even though the U.S. did and keep the Mexican economy from tanking! If not you will see unemployment here in Mexico approaching the 50% level as companies leave and exports drop like a stone. By the way Ric Flair knows more about economics than you will ever learn.

      • Mike S

        The US can live without Mexico and Mexico can live without the US…but both countries will unnecessarily suffer if Trump gets his way.

  • mexbungalows

    As an individual who walks the aisles of Soriana, Wal-Mart, and Costco, weekly, I fear a NAFTA collapse will deeply damage both countries. Mr. Trump has got no clue whatsoever about what’s inside shopping carts waiting to check out. There is disparity in trade because imported merchandise is in low demand. Everything from Coca Cola, to wheaties, to Ford pickup trucks are manufactured here not in the USA. Huge car battery manufacturers moved to Monterrey Nuevo Leon. Every transformer since 2005 hanging on every pole in the USA is made in Mexico. If Trump has a bitch, GO AFTER USA corporate executives. They are the ones who shift manufacturing. And as far as workers go, WHERE IS THE BRACERO PROGRAM? Vetted workers? Documented workers. There is no question a lot of misfits from south of the border cause crime in the USA. Hundreds of thousands of petty to major criminals. I not only see this from my end I live it. Deported after jail for selling dope to high school kids. Auto theft. Drunk driving. And zero knowledge, respect, or willingness to accommodate living in a different society. I became a Mexican citizen and I do not hurt people. But if I was indoumented here, I would be warned once, then forcibly deported. Go argue with someone who has not lived in Mexico 53 years. Commit a crime of ANY TYPE, and it’s on the bus to the border you go. Quid Quo Pro does not exist. Reality does not exist the US media and sanctuary cities is a joke. So is rounding up excellent people who deserve a chance to become superior USA citizens. It makes me sick.

  • jdwfinger

    Mexico will be just fine and will continue to be the 3rd world minus country.
    The only problem is that there will be less money to STEAL.

  • cooncats

    Mexico’s problem isn’t Trump or the U.S. Mexico’s problem is gross corruption and theft of public funds at all levels combined with basic ownership of the entire country by a handful of rich families. That’s why Mexico’s economy is growing at half the rate it should be when the demographics of a young, energetic and willing to work population are taken into account. As for the rest there’s enough blame to go around for both countries. The U.S. is finally bent out of shape over Mexico using it for a dumping ground of people it can’t provide economic opportunity for thanks to the first sentence above.

    OTOH the U.S. has been an enabler for many decades of the very illegal immigrant invasion it is whining about now. When it served the greedy rich and corporate pigs of the U.S. it was “bienvenidos Mexicanos” but now as per usual too much of a good thing isn’t so good anymore.

    The hypocrisy on both sides of the border is mind boggling.

  • Bruce Gallo

    Mexico knows there is NO WAY you let a 30~40 $BILLION CUSTOMER WALK . to think or say anything to the contrary is nonsense. Lets put MORE Americans back to work and see what the MX. PESO at 20 to 1 to the US dollar will do for the consumer/ workers in Mexico . Bwahhhh. what a joke

  • sam bell-smith

    trade between our three great countries went on long before nafta and will continue if it dies. most ordinary people will hardly notice the difference, as we didn’t notice any real difference when it was enacted. p.s. as a canadian, except for my homeland, mexico is my favourite country.

  • lang_eddy

    Let the Americans walk away. We, in Canada will adjust fine. Mexico and Canada should stay strong, and look elsewhere, like Asia…..screw the USA. and screw Donald duck trump…..Viva Canada, and Viva Mexico

  • Frederick Rhodes

    First there’s Trump’s leaky oil pipeline disaster resulting from his self serving signature. Next the US will have a Trump induced trade disaster, resulting in higher prices for American.

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