The Strategist

Mexico: Impending NAFTA agreement won't paralyze us

05/12/2017 - 15:03

The European Union and Mexico have expressed their intention to complete negotiations on a new agreement on free trade by the end of 2017. The previous document has been signed 17 years ago, and since then, the volume of bilateral trade has tripled, reaching nearly $ 62 billion in the last year.

The European Union is the third most important commercial partner of Mexico after the US and China. In turn, Mexico occupies the 15th place in the list of EU trade partners. There is no doubt that the negotiations have been speed up thanks to the protectionist plans of the administration of President Donald Trump.

"We are not paralyzed by the fact that Washington is going to reconsider the NAFTA agreement on the North American free trade zone with them and with Canada", Mexican Minister of Economy Ildefonso Guajardo said at a press conference in Mexico City. - Mexico will move forward. Today, the strategy of export diversification has become an indispensable condition for the further development of the Mexican economy. "

"It is known that some people question the advantages of free trade and multilateral regulation", added European Commissioner for Trade Cecilia Malmström. "But those of us who want to do business around the world are ready to build bridges, not walls".

Construction of a border wall between Mexico and the US, aimed to protect the latter from illegal migrants, has also encouraged the Latin American country to cooperate with European partners. 

Earlier, Ildefonso Guajardo announced his intention to expand the existing trade agreement with the European Union due to the actions of the new US administration, Reuters reports.

According to the minister, the country’s leadership is concerned about uncertainty of the prospects for the agreement on the North American Free Trade Area NAFTA.

"We are preparing for the third round of negotiations with the EU in order to deepen and broaden our agreement", Guajardo said, adding that he recently spoke on the phone with European Trade Commissioner Cecilia Malmström.

"We are planning to accelerate our talks", the Mexican Minister explained. He clarified that Mexican President Peña Nieto had instructed his department and the Foreign Ministry to organize free trade negotiations with the countries of the Trans-Pacific Partnership, that is, Australia, Brunei, Malaysia, Singapore, Vietnam and New Zealand.

Apart from Europe, there is another alternative for Mexico. This is China, says Ildefonso Guajardo: "Yes, China is an excellent option, as it is a very important consumer market for agriculture and manufactured goods. And we have made progress in strengthening relations with them". 

The Finance Minister told about the alternatives in the light of tense negotiations about the free trade zone with the United States. The administration of Donald Trump intends to revise the NAFTA agreement signed a quarter of a century ago by Mexico, Canada and the USA: "In fact, Mexico had not received even a thousandth of the volume of international investment from the PRC earlier. And now, China has already invested one billion dollars in Mexican auto parts and in telecommunications services." 


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