[CTC] Ross: NAFTA talks could produce two separate bilateral deals or one trilateral

[Arthur Stamoulis]

Couple on NAFTA...

INSIDE US TRADE
Ross: NAFTA talks could produce two separate bilateral deals or one trilateral
 
March 10, 2017
The U.S. believes NAFTA could be renegotiated as two separate bilaterals or another three-way deal, though Mexico still hopes for trilateral discussions, Commerce Secretary Wilbur Ross and Mexican Economy Minister Ildefonso Guajardo Villarreal said Friday.

The two appeared together to announce a new round of negotiations in a long-running sugar dispute and took questions from reporters about NAFTA timing and other issues.

Asked if the U.S. plans to continue three-way discussions as the process of reopening NAFTA gets underway, Ross said those talks will lead either to “two parallel bilaterals with symmetrical provisions or one new trilateral.”

“We're less concerned at this stage with the exact form than we are with trying to get to the substance,” he said.

Guajardo, however, suggested Mexico wants to stick to a three-way deal.

“NAFTA is a trilateral agreement and it would make a lot of sense to have trilateral discussions in order to be very mindful of the strengths that the North American continent can have in this process,” he said.

Acknowledging “some bilateral issues like security [and] borders,” Guajardo added that “in trade issues once you discuss things like rules of origin it makes a lot of sense to discuss them trilaterally.”

On timing, Ross said the U.S. “hopefully” will issue a formal notice of its intent to start NAFTA negotiations “in the next couple of weeks,” triggering a 90-day internal U.S. process before talks can begin with Mexico and Canada.

Ross reiterated that the administration has been discussing its plans on NAFTA with relevant congressional committees, but the formal process, as prescribed in the Trade Promotion Authority law, has yet to begin.

Guajardo offered that Mexico will be “ready by the end of May to start negotiations at any point” once the U.S. and Canada have finished their internal processes to “kick off negotiations.”

Sources told Inside U.S. Trade a meeting between Guajardo, Ross and members of the Trump trade team earlier this week was “very positive,” but said it did not include detailed discussions on NAFTA because the Trump administration is “respecting” TPA procedures.

Ross said it would be “premature” to discuss specific U.S. negotiating objectives.

Ross was also asked about which countries it is most likely to approach first about trade deals; he said the first priority is to “tidy up our own neighborhood” in dealing with Mexico and Canada, after which Japan is a likely early target for bilateral discussions –Dan Dupont (ddupont at iwpnews.com <mailto:ddupont at iwpnews.com>)

 https://www.bloomberg.com/news/articles/2017-03-10/mexico-lays-out-faster-timeline-for-nafta-deal-than-u-s-signals <https://www.bloomberg.com/news/articles/2017-03-10/mexico-lays-out-faster-timeline-for-nafta-deal-than-u-s-signals>
Mexico Lays Out Faster Nafta Deal Timeline Than U.S. Signals

Eric Martin and Patricia Laya 
March 9, 2017, 7:11 PM EST March 9, 2017, 8:11 PM EST 
Videgaray says Nafta deal could be reached by end of the year 
U.S.’s Ross indicated expectation talks would last into 2018 
Mexico’s chief diplomat said that the nation hopes formal talks to revise the North American Free Trade Agreement will begin at mid-year and wrap up by December, projecting a more ambitious timetable than the one suggested by Donald Trump’s top commerce official.

Based on conversations with the White House, Mexico is looking to start formal Nafta talks in late June or early July, spend several months working and complete them toward year end, Foreign Relations Minister Luis Videgaray said in Washington after meetings with Trump advisers Thursday. On Wednesday, U.S. Commerce Secretary Wilbur Ross said in an interview with Bloomberg TV that the trade talks will probably begin in the latter part of 2017 and that he hopes they won’t last much longer than a year.

If Nafta talks follow the scenario suggested by Ross, uncertainty over the agreement’s fate will likely hang over the July 2018 presidential election in Mexico, which could fuel economic concern, particularly if it seems the agreement will fall apart. The ruling party of President Enrique Pena Nieto and Videgaray is likely to face pressure and criticism from populist opposition candidate Andres Manuel Lopez Obrador, who has led potential rivals in early polls. Mexican law prevents Pena Nieto from running for re-election.

"I want to be precise, and this is based on the conversations that we’ve had today in the White House: Each of the two countries are carrying out their own processes to be in conditions to start the formal trade dialogue towards the end of June or possibly at the start of July," Videgaray said in a news conference at the Mexican Embassy. "Mexico will only accept changes to an international agreement, including Nafta, if they benefit Mexico and Mexicans," he later added.

Pushing the review into the Mexican election season would add another layer of political complexity and only serve to heighten fears about Mexico losing access to its biggest export market, the U.S. The Mexican peso has depreciated more than 7 percent against the dollar since Trump won the presidency as investors bet his pledge to narrow the U.S. trade deficit with its southern neighbor will hurt the economy.

Economy Minister Ildefonso Guajardo said last month that extending talks past early 2018 would be “irresponsibly injecting uncertainty after uncertainty” due to the Mexican elections, and the U.S. mid-term congressional vote in November 2018. Specifics of the Nafta talks will be managed by the economy ministry, Videgaray said Thursday.

BI Primer: Trump Brings Further Downside Risks to Mexico in 2017

Videgaray spoke after meeting Trump senior adviser Jared Kushner; Gary Cohn, the director of Trump’s National Economic Council; and National Security Adviser H.R. McMaster. He said that he spoke on Wednesday with U.S. Secretary of State Rex Tillerson and will probably meet with him again in Washington in the coming weeks.

Videgaray said he expressed to Trump’s team Mexico’s grave concern about the proposal to separate migrant parents from children at the border, saying that he was told that the administration hasn’t yet made a decision on whether to follow that plan and that at this point it’s only something that they’re thinking about. He reiterated that Mexico rejects the U.S. proposal to deport undocumented immigrants from other countries to Mexico, saying that the nation has a right to decide who enters its territory.

Guajardo said in February his country will walk away from Nafta talks if the U.S. insists on slapping duties or quotas on any of its products. Mexico would support updating Nafta to add digital commerce, telecommunications and aspects of the energy industry that were left out of the initial deal, he said. Trump has repeatedly promised to levy a significant tax on auto imports from Mexico.
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