Mexico City: Mexico sees a serious risk the United States will withdraw from NAFTA and is planning for that eventuality, Economy Minister Ildefonso Guajardo (pictured) said, calling talks to renegotiate the deal a “roller coaster” that could lead to an impasse.
US President Donald Trump has threatened three times in the past week to abandon the North American Free Trade Agreement, revisiting his view that the United States would probably have to start the process of exiting the accord to reach a fair deal for his country.
“This is not going to be easy,” Guajardo said at a meeting with senators in Mexico City. “The start of the talks is like a roller coaster.”
Guajardo has previously estimated a 60 percent chance the talks would be wrapped up by an ambitious soft deadline for January, a date Mexico said was important to avoid the talks becoming politicised ahead of its July presidential election. “We are also analysing a scenario with no NAFTA,” Guajardo said.
In an interview published earlier on Tuesday in Mexican business daily El Economista, Guajardo said “there is a risk, and it’s high” that the Trump administration abandons NAFTA. Earlier this month, Guajardo told Reuters a “Plan B” meant being prepared to replace items such as some of the billions of dollars in grain Mexico imports from the United States annually. To that end, and to seek openings in more markets, Mexico is hosting trade talks with Brazil this week.
Overlapping with the NAFTA talks, Mexico will participate in separate trade meetings with Australia and New Zealand in Peru, and President Enrique Pena Nieto travels to China this weekend. Still, attempts to diversify trade will not be easy. Some 80 percent of all Mexican exports go to the United States, and economies such as Brazil and China often compete with Mexico.
Guajardo also suggested World Trade Organization tariffs that would kick in if NAFTA crumbled would be more favorable for Mexico, a view held by many Mexican experts who think trade with the United States would survive the demise of the 1994 deal.
