Mexico, U.S. express cautious optimism on NAFTA deal

MEXICO CITY (Reuters) – Top U.S. and Mexican officials on Thursday expressed cautious optimism that the North American Free Trade Agreement will be renegotiated, speaking ahead of the next round of trade talks later this month.

Asked on local television whether it was more likely the $1.2 trillion trilateral trade pact would survive or die, Mexico’s Foreign Minister Luis Videgaray said there were reasons to be reasonably optimistic, but that Mexico should be prepared for all eventualities.

“We should be prepared for a future with or without NAFTA,” he said.

In Washington, U.S. Treasury Secretary Steven Mnuchin said it was a priority for the Trump administration to renegotiate NAFTA, declining to speculate what the consequences will be if the United States pulls out of the talks.

The seventh round of negotiations kicks off in Mexico City on Feb. 25.

The three countries are renegotiating the 1994 pact, but talks have stalled as Canada and Mexico are at loggerheads with the United States over some of the most contentious proposals its negotiators have put on the table.

“I am cautiously hopeful that (U.S. Trade Representative) Ambassador Lighthizer will be renegotiating this deal,” Mnuchin told the House Ways and Means Committee, which has jurisdiction over trade matters in the U.S. Congress.

“It is a major priority of ours to renegotiate the deal,” he added

U.S. President Donald Trump has called NAFTA one of the worst deals in history and has often threatened to quit the agreement unless he can rework it to better benefit American workers and interests. He blames the pact for U.S. manufacturing job losses, and his remarks about quitting have unsettled financial markets.

At the last round in Montreal, Canada made a number of proposals to address the U.S. insistence that the North American content of autos be raised. Washington also wants a clause that would allow any NAFTA member to pull out after five years.

The upcoming talks in Mexico City are scheduled to start and end one day earlier than initially planned, the economy ministry said.

The early March deadline for wrapping up the talks has been extended to at least early April, officials have said. But participants have said privately it could take months longer than that.

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