Mexico prepares for a post-NAFTA worldBy Elliot Bullman
According to the Associated Press, Mexico is taking U.S. President Donald Trump’s threats to leave the North American Free Trade Agreement very seriously as the second round of renegotiating talks opened Friday Sept. 1 in Mexico City.
In the aftermath of Trump’s tweet last Sunday saying that Mexico and Canada are “both being very difficult, and we may have to terminate,” Mexico now says it is developing a “Plan B” in case Trump withdraws from the trade pact.
We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada.Both being very difficult,may have to terminate?— Donald J. Trump (@realDonaldTrump) 27 de agosto de 2017
Mexico’s Economy Secretary Ildefonso Guajardo told the country’s Senate. “We have to have an alternative plan perfectly prepared. A scenario without NAFTA is something we have to think about.”
Guajardo said key sticking points include U.S. demands to modify NAFTA’s dispute resolution process and tighten labour standards. In comments to Mexico’s Senate, he said that about 15 of the 25 negotiating groups have run into differences after the first round of talks started on Aug. 16 in Washington.
One significant clash is over NAFTA’s method of resolving disputes. The current agreement allows binational panels of private experts to decide differences, making it harder for one nation to unilaterally impose tariffs on another. The United States wants to eliminate those panels, but Canada and Mexico fear that would allow the U.S. to throw its greater weight around.
U.S. negotiators also want to tighten enforcement of labour standards, which are currently covered in a largely toothless NAFTA side agreement. A key draw for foreign assembly plants and investment has been Mexico’s low wages. While average manufacturing wages in China had risen to $3.60 per hour by 2016, Mexico’s had shrunk to $2.10, a level some economists say is artificially low.
With many workers unable to afford the vehicles Mexico produces, the country exports about three times as many cars as are purchased domestically. Most of those exports go to the United States.
- North Korea threatens to cancel Trump summit
- AMLO’s win could be a landslide with congressional majority: UBS
- Google and Facebook, big winners after ban on sports betting was overturned
- Would you pay your ex a 'break-up fee'?
- Why Trump suddenly reversed course on sanctions against Chinese tech giant ZTE
- Are you ready for retirement? Here’s how to know.
- Tariffs on steel for Mexico and Canada will depend on NAFTA: Ross
- Sergei Skripal reportedly briefed European intelligence agencies about Russia
- The EU's billion-dollar deals at risk in the Iran nuclear deal
- Pompeo: U.S. firms could invest in North Korea and Kim may get ‘security assurances’
- 'Unauthorized transfers' siphon funds from Mexican banks: central bank
- RBS is swallowing a 'milestone' $4.9 billion fine for its role in the financial crisis — and shares are going up