Spotlight: Mexico expects constructive NAFTA renegotiation

Source: Xinhua| 2017-08-12 14:30:11|Editor: Yurou
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by Luis Rojas

MEXICO CITY, Aug. 11 (Xinhua) -- Mexico expects to hold constructive talks to renegotiate the North American Free Trade Agreement (NAFTA) with its two regional trade partners, with an eye to boosting trade and competitiveness in the region.

Mexico, the United States and Canada will sit down next week to renegotiate NAFTA, which created what used to be the world's largest free-trade area.

The first trilateral talks will be held from Aug. 16 to 20 in Washington, as part of a renegotiation effort that could entail six to nine negotiating rounds, according to Mexicon Economy Minister Ildefonso Guajardo.

The second gathering will be hosted in Mexico City at the beginning of September.

The first round will see 25 work tables installed to simultaneously tackle different areas of trade. Afterwards, the countries trade ministers will decide which path to take next, Guajardo told reporters.


Kenneth Smith, the head of Mexico's technical negotiating team, said Thursday that the two-decade trade deal still has potential for growth, thanks to the dynamism of the U.S., Canadian and Mexican markets.

"In terms of trade growth, we have very large potential. Obviously we (Mexico) are already the second largest buyer of U.S. products and the United States is the leading destination for our exports," said Smith.

Since taking effect in 1994, NAFTA has made North America one of the world's most profitable regions, representing one-fourth of global gross domestic product (GDP), the American Chamber of Commerce says.

Trade between Mexico and the United States quadrupled to 310 billion U.S. dollars in 2016 from 42 billion dollars in 1994, according to Mexico's leading industry group, the Confederation of Industrial Chambers.

The Washington-based Wilson Center says Mexicans on average consume some 1,801 dollars' worth of U.S. products a year.

Mexico has not revealed its specific negotiating goals, but it has four areas of concern: strengthening North America's competitiveness, moving towards inclusive and responsible regional trade, making the most of the opportunities offered by the 21st-century economy, and promoting certainty for trade and investment.

The United States has said it wants to eliminate barriers to its exports, unfair subsidies, and the practices of state-run companies, as well as correct imbalances in its external accounts, one of the primary concerns of U.S. President Donald Trump.

Canada has not said what its objectives are.


Mexican former ambassador to Canada, Francisco Suarez, told Xinhua that the United States' two trade partners need to defend NAFTA and the benefits it has brought, and prevent a return to the days of trade tariffs, though he acknowledged the treaty could be updated.

"I think that as part of this negotiation, they should modify some parts, such as rules of origin, and also accept the inclusion of some matters from the Trans-Pacific (Partnership) agreement, such as e-commerce, energy, environment and a chapter against corruption," said Suarez.

Smith said that in the lead-up to the first round of talks, the United States is carrying out a risk analysis in the area of agriculture, including sanitary and phytosanitary matters, before deciding whether to grant unrestricted access.

"We are also seeking to expand markets that can export avocados to the United States, and that is part of what we have been working on for some time in the area of bilateral ties, to continue making progress in these fields," said Smith.

What Mexico wants is "to maintain and strengthen free trade, that is to eliminate any non-tariff barrier that exists," Smith said.

Eugenio Salinas, the vice president of International Negotiations at the Mexican Business Council for Foreign Trade, highlighted Mexico's priorities for the negotiations.

Mexico's private sector and government officials agree they will not accept the introduction of tariffs or other types of trade barriers, he said.

The trilateral talks should tackle new issues related to state-run companies, denomination of origin, handling biotech products, e-commerce, copyright and the energy sector, he said.

"We will have to see what the U.S.' interests are in each sector and then, in consultation with the Mexican private sector, outline what we want, what we don't want and what we can accept," said Salinas.

Salinas foresees the negotiations concluding at the end of this year or the beginning of the next, with each country's legislatures then ratifying the updated trade deal by the end of 2018.