News & Events
NAFTA Renegotiation and Manufacturing in Mexico in a Trump Era

Manufacturing in Mexico is and will always be strong.

NAFTA has improved the economies of its three member nations, added millions of new jobs and created a successful and profitable atmosphere of cooperation. Since its inception in 1994, imports and exports have quadrupled, foreign direct investment grows in billions every year, and manufacturing has become a cooperative effort where products are built from multi-origin parts.

Businesses faced with global competitiveness have not only stayed in business, but have expanded capabilities and increased their profit margins, all while being able to hire more people and innovate in their industries like never before. While headlines continue to include words like “worry” and “uncertainty” in regards to President Trump’s position on NAFTA and trade with Mexico, the reality of free trade and the interwovenness of North America’s economies is a testament to the success of international trade.

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The mayors of the largest metropolitan area on the U.S.-Mexico border called Monday for stronger binational ties, striking a sharp contrast with U.S. President Donald Trump's calls to build a wall and renegotiate NAFTA, the North American Free Trade Agreement.

San Diego's Kevin Faulconer and Tijuana's Juan Manuel Gastelum didn't mention Trump or Mexican President Enrique Pena Nieto by name at a joint news conference, but their concern about growing tension between the two countries and its potential economic impact was evident in their remarks.

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Donald Trump campaigned for the presidency by deriding NAFTA, the free trade pact between the US, Canada, and Mexico, as a job killer and “the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country." Just a few weeks into office, he’s getting ready to renegotiate it.

During a meeting with congressional leaders at the White House last week, Trump slammed NAFTA as a ”catastrophe for our workers and our jobs and our companies," and declared his intention to “kick-start” negotiations with the US’s partners as quickly as possible. That was the day after the Mexican government announced that it had begun a 90-day period of consulting with its business sector in preparation for NAFTA talks. Canada hasn’t made indications about a timeline yet, but said it’s open to renegotiation as well.

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How could Mexico inflict the most damage on the United States? In normal times this question would not be top of mind for Mexican policy makers. Mexican governments over the last quarter-century have consistently pushed back against the nation’s historical resentment toward the United States, hoping to build a more cooperative relationship with its overbearing northern neighbor.

But these aren’t normal times. As President Trump prepares the opening gambit in his project to either renegotiate the North American Free Trade Agreement or pull out, Mexico’s most important strategic goal is narrowing to one word: deterrence.

It must convince Mr. Trump that if he blows up the trade agreement on which Mexico has staked its hopes of development, by weaving its economy ever more closely into that of the United States, the United States will suffer, too.

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President Trump is not happy with the North American Free Trade Association (NAFTA). During the Presidential campaign, he described it as the 'worst trade agreement the U.S. ever signed'. He blames it for the loss of large numbers of manufacturing jobs across the border to Mexico, where wages are lower. According to the White House website’s new page on trade, 'blue-collar towns and cities have watched their factories close and good-paying jobs move overseas, while Americans face a mounting trade deficit and a devastated manufacturing base.

The government will speed up talks to reach free trade agreements (FTA) with Japan, Mexico and other countries to cope with increasing protectionism, according to officials.

It will also import more products from the United States such as aircraft and industrial machinery to cut Korea's trade surplus with the country. These measures are part of the 2017 external economic policy directives, which the government revealed Thursday.

According to the finance ministry, Korea will focus on signing bilateral FTAs with more countries to open up new markets. While multilateral FTAs involving regional economic blocs were the norm a few years ago, protectionism is becoming a new dominant trend in global trade, especially with the inauguration of the Donald Trump administration in the U.S.

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