Mexican FM: Mexico-US trade would survive NAFTA

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Trade between the United States and Mexico would not end if the North American Free Trade Agreement (NAFTA) was terminated, Mexico’s foreign minister said on Friday, after a new US plan emerged to build a five-year sunset provision into the treaty.

Under the uncertainty, US President Donald Trump and his officials have set an ambitious goal to renegotiate the 23-year-old trade pact between Mexico, Canada, and the United States within the next few months.

Mexican Foreign Minister Luis Videgaray said currently about half of Mexico’s trade with the United States did not use NAFTA channels, and that if the deal were to end the tariffs it would face would average 3 percent, not enough to halt trading.

AFP Photo

According to Reuters's report, Videgaray thinks “Mexico is much bigger than NAFTA.”

“If the negotiation does not go well, it would not be the end of trade between Mexico and the United States...There would be no leap into the abyss,” he said, arguing that World Trade Organization tariffs would govern trade post-NAFTA.

He also mentioned that Mexico could put higher tariffs on US products, noting that apples from Arizona could face a 50 percent tariff to enter Mexico without NAFTA.

The three countries are due to sit down for a third round of talks in Ottawa, Canada on September 23.

AFP Photo

US Commerce Secretary Wilbur Ross Thursday said the United States was seeking to add a five-year sunset provision to NAFTA to provide a regular “systematic re-examination” of the pact.

Ross argued it was needed because forecasts for US export and job growth when NAFTA took effect in 1994 were “wildly optimistic” and failed to live up to expectations.

White House officials confirmed President Trump will dine with several Latin Americans leaders, includes Colombian President Juan Manuel Santos, Peru’s President Pedro Pablo Kuczynski and Brazilian President Michel Temer, on Monday night to address the Venezuela crisis and build bridges with the region after an acrimonious start with neighbor Mexico.

Screenshot of US President Donald Trump's Twitter page

US and Mexican relations have been badly damaged by Trump’s threats to curtail trade with Mexico's economy as well as his demand that Mexico pays for a border wall to keep out immigrants and drug traffickers.

US President Donald Trump on Friday again called for the expansion of his travel ban in the wake of an overseas terror incident, railing against "loser terrorists" behind the London Tube explosion.

"The travel ban into the United States should be far larger, tougher and more specific," Trump tweeted.

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