[CTC] Mexico expects NAFTA renegotiation to begin in early May

[Arthur Stamoulis]

Several articles below…


https://www.washingtonpost.com/news/wonk/wp/2017/02/01/nafta-renegotiation-has-already-begun-mexican-government-document-signals/?utm_term=.355aa2e789c2 <https://www.washingtonpost.com/news/wonk/wp/2017/02/01/nafta-renegotiation-has-already-begun-mexican-government-document-signals/?utm_term=.355aa2e789c2>
U.S. and Mexico appear to take first steps toward renegotiating NAFTA, document suggests

By Ana Swanson <https://www.washingtonpost.com/people/ana-swanson/> and Joshua Partlow <https://www.washingtonpost.com/people/joshua-partlow/> February 1 at 6:52 PM
 <>The United States and Mexico appear to have taken the first steps toward renegotiating the North American Free Trade Agreement, according to a Mexican government document, walking down a path that would fulfill one of President Trump's big campaign promises and potentially transform the hemisphere's economy.

A communique posted by Mexico's foreign and economic ministries on a government website on Wednesday said that the Mexican government had begun a series of consultations with the private sector, a process which it said would take 90 days. "The consultation in Mexico will start simultaneously with the internal process being carried out by the government of the United States," the document said.

The White House did not respond to a request for comment and officials in the U.S. Congress said they had not yet been notified of any formal action. But trade economists said the process might be tied to U.S. legislation passed under former president Barack Obama that gives the president power to quickly broker a new trade agreement. Called fast-track authority, it requires the president to notify Congress 90 days before signing a new trade agreement.

If the White House is indeed proceeding under fast-track authority, that suggests Trump could intend to scrap NAFTA altogether and forge bilateral trade deals with Mexico and Canada instead, said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics. Trump and his administration have expressed a preference for bilateral deals, which they say allow the United States to better wield its economic heft at the negotiating table.

"I think they want to retire the name NAFTA, say they got rid of it, then put it into the history books," said Hufbauer.

It's still possible, however, that the process will be terminated if the U.S., Mexico and Canada agree to terms overhauling NAFTA.

Renegotiating NAFTA was one of the major promises Trump made on the campaign trail, where he criticized the 25-year-old trade pact for hollowing out America’s manufacturing sector. The news comes as Trump reassesses America's system of trade and immigration. He has already pulled out of the Trans-Pacific Partnership, a Pacific Rim trade deal crafted by the Obama administration.

This historic shift in trade policy is likely to have wide-ranging implications for multinational companies, which have strung factories and facilities across the North America to take advantage of NAFTA’s terms. It could also portend changes for American consumers, who for decades have enjoyed cheap goods manufactured just over the border.

The specific effects on American businesses and consumers would hinge on the terms of the trade deals that replace it. But if tougher barriers to Mexican imports were to provoke retaliatory action by Mexico, the effect could be damaging to American manufacturing communities, said Hufbauer. “There would be a lot of localized pain of going down this path, and there may be some products that are suddenly more expensive than they otherwise would have been.”

For Mexico, the ultimate goal in the trade negotiations with the United States is to maintain the flow of free trade that NAFTA has created between the two countries. The United States is Mexico’s largest trading partner and the destination of 80 percent of its exports.

“We want to arrive at an agreement,” Foreign Minister Luis Videgaray told reporters on Wednesday.

Mexican officials plan to use the 90 day consultation period to meet with domestic industry leaders in farming, manufacturing, textiles, petroleum, and other sectors, to see what aspects of NAFTA could be improved. The discussions will be coordinated by the secretary of the economy.

“This gives us a very solid preparation to enter the dialogue once the 90 days passes,” Videgaray said.

At the same time, Mexico is also looking to expand trade ties with other countries, in case trade with the United States gets restricted. Mexican officials have already begun talks with Argentina and Brazil, and are interested in discussions with Malaysia, Australia, Singapore and others.

Trump has already clashed publicly with Mexican President Enrique Peña Nieto. Following a spat on social media on Jan. 26 over who would pay for Trump’s border wall, Nieto called off a scheduled visit to Washington the following week. The next day, Trump and Nieto discussed the U.S.-Mexico relationship by phone for an hour.

During the campaign, Trump announced his intention to renegotiate the sweeping trade deal between the United States, Canada and Mexico on his first day in office.

"If I win, day one, we are going to announce our plans to renegotiate NAFTA," he told a crowd in Greensboro, N.C., in October <https://www.donaldjtrump.com/press-releases/donald-j.-trump-remarks-in-portsmouth-nh>.

Influential in the negotiations are likely to be two men who are not yet confirmed for their positions: Commerce Secretary nominee Wilbur Ross and Trump's pick for the U.S. Trade Representative, Robert Lighthizer.

NAFTA became a divisive issue in the 2016 campaign, as critics on both the left and the right disparaged it for siphoning off good-paying American manufacturing jobs. Trump repeatedly criticized former President Bill Clinton’s role in negotiating NAFTA, calling it “the worst trade deal maybe ever signed anywhere.”

Economists have generally disagreed, or expressed more nuanced concerns. In a panel of 41 prominent economists surveyed <http://www.igmchicago.org/surveys/free-trade> in 2012 by the University of Chicago, 85 percent agreed or strongly agreed that Americans were better off under NAFTA than previously existing trade rules among the U.S., Canada and Mexico, while only 5 percent said they were uncertain. None disagreed with the statement.

More recent research by John McLaren of the University of Virginia and Shushanik Hakobyan of Fordham University has shown <http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00587> that blue-collar workers in industries most affected by NAFTA had lower wage growth over the 1990s compared with other workers. The study concluded that the overall impact of NAFTA on American wages was small, but heavily concentrated in some communities.

The trade pact dates to 1992, when President George H.W. Bush negotiated it in his final year in office. Congress approved the deal the next year under Clinton, and it finally took effect in 1994, establishing an unprecedented free-trade zone across North America.

Over the next decade, the flow of goods and services between the U.S. and Mexico more than quintupled.

By reducing barriers to trade, the deal aimed to knit the countries of North America closer together and expand their economies. It also specifically aimed to help the struggling Mexican economy. By raising the standard of living, many supporters argued the deal would cut down on illegal immigration from Mexico to the United States.

In his criticism of trade deals, Trump has formed an unusual alliance with labor-friendly figures on the political left. Former Democratic presidential candidate Bernie Sanders has said he hoped “very much that President Trump will come on board and work with us as we revamp in a very fundamental way our trade policies.”

Republicans, however, have been more traditional defenders of open trade. who have traditionally viewed free trade as a driver of economic growth. “As I frequently tell my friends in Mexico, we can't get a divorce. We need to figure out how to make this marriage work," Senate Majority Whip John Cornyn (R-Tex.) told CNN recently.

Trump does not require Congressional approval to exit NAFTA. Article 2205 of the agreement allows any party to withdraw six months after providing written notice to the other parties. Trump would have to take additional steps to raise tariffs on imports from those countries.

Ross echoed the need to renegotiate the deal in his Senate confirmation hearing on Jan. 18. He criticized the deal for its weak enforcement on environmental and labor standards, and said that NAFTA was “logically the first thing” for the Trump administration to work on.

“All aspects of NAFTA will be put on the table,” Ross said.



INSIDE US TRADE
Report: Mexico expects NAFTA renegotiation to begin in early May

February 01, 2017 
The government of Mexico has announced it expects talks with Washington and Ottawa to reopen the North American Free Trade Agreement to begin in May – and says the Trump administration will notify the U.S. Congress this week of its intent to start the renegotiation process.

“The government said Wednesday it will launch a formal 90-day period of consultations with the private sector to 'set the parameters that will guide the revision and deepening' of NAFTA,” AFP reports <https://www.yahoo.com/news/nafta-negotiation-may-start-may-mexico-172015457.html>.

Mexico's Economy Minister Ildefonso Guajardo, who met with U.S. officials in Washington last week, said the Trump administration is expected to notify Congress this week of its intention to renegotiate NAFTA, the report adds.

“Negotiations 'would start in early May,' Guajardo told the Televisa network late Tuesday,” the news wire said. “Using a metaphor, he said that by then the Mexican government would need to have a 'flight plan to have safe landing strips.'”

AFP says Mexico's foreign and economy ministries said in a joint statement that Mexico's internal discussions will begin at the same time the U.S. starts its own consultations.

President Trump has repeatedly bashed the deal, claiming it has been “one-sided” from the beginning and has led to a $60 billion trade deficit with Mexico.

Trump's nominee for Commerce secretary, Wilbur Ross, said at his confirmation hearing before the Senate Commerce Committee that renegotiating NAFTA will be tackled very early on <https://insidetrade.com/node/157223> – echoing Trump's pledge to begin talks within his first 100 days in office.

“The president-elect has made no secret in his public remarks nor have I in earlier remarks during the campaign that NAFTA is logically the first thing for us to deal with,” Ross told the panel on Jan. 18. “We should solidify relationships in the best way we can in our own territory before we go off to other jurisdictions. So I think that should be and hopefully will be, if I’m confirmed, a very, very early topic in this administration.”

Mexican President Enrique Pena Nieto was slated to meet with Trump at the Oval Office this week but canceled the meeting following Trump's insistence that Mexico will pay for his planned border wall.



https://www.yahoo.com/news/trump-mexico-care-bad-hombres-us-might-231304076--politics.html

Trump to Mexico: Take care of 'bad hombres' or US might

 <http://www.ap.org/>	
VIVIAN SALAMA
Associated Press <http://www.ap.org/>February 1, 2017
WASHINGTON (AP) — President Donald Trump threatened in a phone call with his Mexican counterpart to send U.S. troops to stop "bad hombres down there" unless the Mexican military does more to control them, according to an excerpt of a transcript of the conversation obtained by The Associated Press.

The excerpt of the call did not detail who exactly Trump considered "bad hombres," nor did it make clear the tone and context of the remark, made in a Friday morning phone call between the leaders. It also did not contain Mexican President Enrique Pena Nieto's response.

Still, the excerpt offers a rare and striking look at how the new president is conducting diplomacy behind closed doors. Trump's remarks suggest he is using the same tough and blunt talk with world leaders that he used to rally crowds on the campaign trail.

A White House spokesman did not respond to requests for comment. The Mexican government said the account was not accurate.

The phone call between the leaders was intended to patch things up between the new president and his ally. The two have had a series of public spats over Trump's determination to have Mexico pay for the planned border wall, something Mexico steadfastly refuses to agree to.

"You have a bunch of bad hombres down there," Trump told Pena Nieto, according to the excerpt given to AP. "You aren't doing enough to stop them. I think your military is scared. Our military isn't, so I just might send them down to take care of it."

A person with access to the official transcript of the phone call provided only that portion of the conversation to The Associated Press. The person gave it on condition of anonymity because the administration did not make the details of the call public.

The Mexican website, Aristegui Noticias, on Tuesday published a similar account of phone call, based on the reporting of journalist Dolia Estevez. The report described Trump as humiliating Pena Nieto in a confrontational conversation.

Mexico's foreign relations department denied that account, saying it "is based on absolute falsehoods," and later said the statement also applied to the excerpt provided to AP.

"The assertions that you make about said conversation do not correspond to the reality of it," the statement said. "The tone was constructive and it was agreed by the presidents to continue working and that the teams will continue to meet frequently to construct an agreement that is positive for Mexico and for the United States."

Trump has used the phrase "bad hombres" before. In an October presidential debate, he vowed to get rid the U.S. of "drug lords" and "bad people."

"We have some bad hombres here, and we're going to get them out," he said. The phrase ricocheted on social media with Trump opponents saying he was denigrating immigrants.

Trump's comment was in line with the new administration's bullish stance on foreign policy matters in general, and the president's willingness to break long-standing norms around the globe.

Before his inauguration, Trump spoke to the president of Taiwan, breaking long-standing U.S. policy and irritating China. His temporary ban on refugees and travelers from seven Muslim-majority countries, aimed at reviewing screening procedures to lessen the threat of extremist attacks, has caused consternation around the world.

But nothing has created the level of bickering as the border wall, a centerpiece of his campaign. Mexico has consistently said it would not pay for the wall and opposes it. Before the phone call, Pena Nieto canceled a planned visit to the United States.

The fresh fight with Mexico last week arose over trade as the White House proposed a 20 percent tax on imports from the key U.S. ally to finance the wall after Pena Nieto abruptly scrapped his Jan. 31 trip to Washington.

The U.S. and Mexico conduct some $1.6 billion a day in cross-border trade, and cooperate on everything from migration to anti-drug enforcement to major environmental issues.

Trump tasked his son-in-law and senior adviser, Jared Kushner — a real estate executive with no foreign policy experience — with managing the ongoing dispute, according to an administration official with knowledge of the call.

At a press conference with British Prime Minister Theresa May last week, Trump described his call with Pena Nieto as "friendly."

In a statement, the White House said the two leaders acknowledged their "clear and very public differences" and agreed to work through the immigration disagreement as part of broader discussions on the relationship between their countries.

___

Associated Press writer Mark Stevenson in Mexico City contributed to this report.




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