(Bloomberg) — Mexico is redoubling its efforts to reach a Nafta agreement with the U.S. and Canada by the end of August, according to three people familiar with the negotiations, as President Donald Trump said he’s heading toward a “dramatic” deal with Mexico.
Trump on Monday said that he’s in discussions with incoming Mexican President Andres Manuel Lopez Obrador about doing something “very dramatic, very positive for both countries,” without giving more details. Mexico’s peso extended gains after Trump’s remarks, rising 0.7 percent to 18.8951 per dollar at 4:48 p.m. in New York.
Lopez Obrador is “a terrific person,” Trump said at a Made in America event at the White House, adding he spoke to the Mexican president-elect “at length on a call.”
Minutes later, Lopez Obrador told reporters in Mexico City he’s not aware of the deal that Trump was referring to, but that he’s open to talking to the administration about one.
A quick agreement would allow Lopez Obrador to focus on domestic priorities when he takes office Dec. 1, while shielding him from any potential criticism involving the outcome of the negotiations, according to the people, who asked not to be named discussing private talks. Republicans in November’s midterms could also tout the agreement as U.S. President Donald Trump accomplishing his 2016 presidential campaign pledge to fix or abandon Nafta.
Stalled Talks
High-level Nafta negotiations are set to resume this week after a two-month hiatus for Mexico’s July 1 presidential elections. While the nations had said progress was made earlier this year, the pact’s future hangs in doubt. Trump last week repeated his threat to pursue individual deals with Mexico and Canada, and the three nations still remain far apart on major points almost a year after the negotiations first began.
An agreement depends on U.S. willingness to back off proposals that are opposed by Mexico, Canada and American business groups, such as an automatic expiration of the deal after five years and the end of dispute resolution panels, according to the people. U.S. Trade Representative Robert Lighthizer hasn’t shown an openness to do that, the people said.
Canadian Foreign Minister Chrystia Freeland is scheduled to travel to Mexico City on Wednesday to meet with officials from the current and incoming Mexican administrations, including Lopez Obrador. Mexican Economy Minister Ildefonso Guajardo said last week that he and his team plan to travel to Washington on Thursday to meet with Lighthizer.
The Canadian foreign ministry didn’t immediately respond to requests for comment. Lighthizer’s office and Mexico’s economy ministry declined to comment. The White House didn’t immediately respond to requests for comment.
The Mexican foreign ministry on Saturday said that Jesus Seade, named by Lopez Obrador as his chief Nafta negotiator, will join the team on its trip to Washington. Seade said in an interview last month that he sees a deal as possible before the U.S. congressional election, and that the incoming president’s team fundamentally agrees with the nation’s current negotiating positions.
Guajardo last week alluded to the possibility of an August deal. In an interview with Radio Formula, he said that in closed-door meetings with the current and incoming governments earlier this month, U.S. officials including Secretary of State Mike Pompeo indicated a desire to have a deal in 45 days.
Mexico is moving ahead in its efforts to integrate with the economies of South America and make itself less dependent on the U.S., which bought 72 percent of the nation’s exports last year, according to data from the International Monetary Fund.
Mexico’s current leader, President Enrique Pena Nieto, on Monday and Tuesday is hosting leaders including Brazil’s Michel Temer and Argentina officials for a summit focused on bridging the gaps between Latin America’s two major trade blocs: Mercosur, spearheaded by Brazil and Argentina, and the Pacific Alliance, which includes Mexico, Colombia, Peru and Chile.
While Trump said last week he may prioritize a bilateral trade talks with Mexico over Canada, both the current and incoming Mexican administrations have expressed a preference to preserve a three-nation free-trade agreement.
Source: Investing.com
