Mexico and Canada Say Nafta Talks With U.S. Should Be Trilateral
May 23 2017 - 04:20PM
Dow Jones News
By Anthony Harrup
MEXICO CITY -- Mexican and Canadian officials said Tuesday that
negotiations to update the North American Free Trade Agreement with
the U.S. should be trilateral as a matter of common sense, and that
replacing it with bilateral pacts would be impractical.
"Nafta is a trilateral agreement, and that has worked because
it's a trilateral North American trading relationship," Canada's
Minister for Foreign Affairs Chrystia Freeland said at an event in
Mexico City. "Nafta can be modernized only with the agreement of
the three parties...and I am confident that that will be how we
go."
The view was echoed by Mexican Foreign Minister Luis Videgaray,
who said three bilateral agreements between the three countries
would be impractical and a lost opportunity.
"In the very beginning Nafta was not a trilateral deal, but
after some thought, common sense made it a trilateral deal. And
that was 25 years ago when the integration of value chains was not
present," he said.
U.S. Commerce Secretary Wilbur Ross has said that the reworking
of Nafta could be as the existing trilateral pact or a series of
bilateral agreements with symmetrical provisions. U.S. President
Donald Trump has kept open the possibility of abandoning Nafta if
the U.S. doesn't secure a satisfactory deal.
The Trump administration notified Congress earlier this month of
its intention to renegotiate the 23-year-old trade pact, and formal
talks are expected to begin by mid or late August.
U.S. Trade Representative Robert Lighthizer has said the U.S.
hopes to maintain the existing structure of the agreement, although
there are no guarantees, and that many parts of the negotiation
will be conducted bilaterally.
Ms. Freeland acknowledged that some issues within the region are
bilateral by nature, such as U.S. disputes with Canada over lumber
and with Mexico over sugar.
Mexican Economy Minister Ildefonso Guajardo warned against too
much optimism after the notification sent to Congress appeared to
be simpler and more general than had been expected. The Trump
administration still has to send Congress details of its concrete
objectives before talks can begin.
"This second document is the most relevant to see clearly what
goals will be set out in this process," Mr. Guajardo said at the
event.
Mexico favors adding subjects to Nafta such as information
technology and e-commerce, and is willing to address rules of
origin to source more components in the region, "as long as we
don't shoot ourselves in the foot and all end up losing," he
said.
For example, of the TV screens assembled in Mexico for export,
only 32% of the content comes from North America and the rest from
Asia. An "illogically ambitious" attempt to raise the regional
content to say 90% could make it easier for companies like LG and
Samsung to export whole TV sets and pay corresponding tariffs than
to relocate production, he said.
Mr. Guajardo stressed Mexico's opposition to the reintroduction
of quotas or trade tariffs, and said actions to address trade
imbalances should be through increased levels of trade and not
through trade restrictions. Mr. Trump has said he wants to
eventually eliminate U.S. deficits such as the $63 billion trade
gap it had last year with Mexico.
--William Mauldin contributed to this article
Write to Anthony Harrup at anthony.harrup@wsj.com
(END) Dow Jones Newswires
May 23, 2017 16:05 ET (20:05 GMT)
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