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Mexico Hails US initiation of Nafta Renegotiation Process

Mexico praised US President Donald Trump's action to initiate the renegotiation of the North America Free Trade Agreement (Nafta) with the formal declaration of the administration's intentions to the US legislature.

The action, carried out through the office of US trade representative Robert Lighthizer, starts the clock on a 90-day period of consultations with the public and legislators, making it possible for the formal renegotiation process to begin August 16.

"Through these negotiations, the United States seeks to support higher-paying jobs in the United States and to grow the U.S. economy by improving U.S. opportunities to trade with Canada and Mexico," read a statement from Lighthizer's office.

Mexico's economy ministry celebrated the action in a response, saying, "Mexico looks forward to a constructive negotiation process that allows for increased cooperation and economic integration."

The ministry described the letter as "an important step" in the modernization of Nafta, adding, "The countries of North America deserve a modern instrument to regulate their trade relations."

"The trilateral agreement has been of immense benefit to all parties," said the statement, adding Mexico began its own internal consultations in February and is ready to renegotiate terms with the US and Canada.

Trump in past rhetoric has repeatedly lambasted Nafta, often calling it "the single worst trade deal ever", winning support from areas hard-hit by the loss of manufacturing jobs since the free trade agreement's inception 23 years ago.

However, Trump critics have often pointed to the advance of robotics and the explosive growth of China's manufacturing sector as greater culprits in the loss of US jobs. In addition, Nafta has more than quadrupled trade between the three nations, generating millions of jobs.

Mexico's economy, particularly foreign direct investment, has been deeply affected by the prospect of the US scrapping Nafta, but Trump's latest move seems to further confirm a more measured approach to renegotiate and modernize rather than eliminate the agreement.

US representative Henry Cuellar, an opposition legislature from key border state of Texas, hailed the move in a sign that Trump may be able to win broad domestic support for a renegotiation deal.

"I am glad to see they finally agree with me that the best path forward is to update Nafta, not dismantle it," said Cuellar in an emailed statement.

"If the Trump administration is sincere, I am more than ready to roll up my sleeves and work with them, to forge a deal that boosts American jobs," said the US legislator.

Texas, like California, Arizona and New Mexico, have become vital hubs for supply chains generated through Nafta, and Trump face swift opposition from the states' legislators and governors – including both Democrats and Republicans – to broad changes to US-Mexico trade relations that would hurt these states' economies.

"Nafta has been a big success for Texas and the entire United States. Trade from Nafta supports more than 1.5 million Texas jobs," said Cuellar. "I hope the administration plans to negotiate in good faith with our friends Canada and Mexico."

The 14-year US representative for Texas also hinted at potential integration of policies developed during planning for the now-defunct Trans-Pacific Partnership.

"We have an opportunity to bring the deal into the 21st century by looking at the work we did for the Trans-Pacific Partnership agreement," he said.

Source: BN Americas

By: James Young

Mexico Manufacturing Industry News

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