S&P warns NAFTA ‘retreat’ could trigger Mexico rating cut

LONDON (Reuters) – S&P Global warned on Friday that it could downgrade Mexico’s BBB+ credit rating if there was a “retreat” from the NAFTA trade pact that it shares with the United States and Canada.

A retreat wouldn’t necessarily mean a complete scrapping of NAFTA but it would mean changes that lessen its benefits, one of S&P’s top sovereign analysts, Joydeep Mukherji, said.

“A prolonged fall in the GDP growth rate resulting from a retreat from NAFTA would weaken government revenues, potentially resulting in higher fiscal deficits and a rising burden of government debt.”

“We could lower our rating on Mexico as a result.”

Mukherji said S&P’s current expectation was that the three governments would eventually resolve their differences in a manner that does not undermine NAFTA’s role or materially damage trade and capital flows between their countries.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.