Mexico private sector eyes more NAFTA content in future products

Reuters Politics 4 months ago

A modernization of the NAFTA trade deal should protect existing industrial supply chains in North America, but could seek to source more work for future products from the member states to help create jobs, a top Mexican negotiator in the process said.

The government of U.S. President Donald Trump on Thursday triggered the process to start renegotiating the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, which could usher in formal talks by mid-August.

Trump has threatened to jettison the 23-year-old accord if he cannot rework it in favor of the United States, arguing it has gutted U.S. manufacturing by outsourcing jobs to Mexico.

NAFTA's supporters say the integration of lower-cost Mexico into production chains has safeguarded employment by enabling North America to compete better with Asian and European rivals.

Mexican business leaders say toughening rules that stipulate a certain amount of content must be sourced from North America to qualify for NAFTA certification could be one way of allaying U.S. fears, and pave the way for an agreement on the revamp.

Offering insight into how Mexico may seek to broker a deal, Moises Kalach, a linchpin of the country's private sector defense of NAFTA, said U.S. business leaders and government officials were increasingly persuaded that existing supply chains should not be disrupted - but that future production lines could be tailored to provide more work for North America.

"Obviously, innovation and technology have been changing the way and even form of how products are made, and there's an opportunity to have certain products and innovations made with a lot more regional integration, without doing damage to current lines of production," Kalach, who heads the international negotiating team of Mexico's Consejo Coordinador Empresarial business lobby, said by phone from Washington.

"This is part of the proposal that we want to put on the table, that we want to push," Kalach added, speaking after U.S. Trade Representative Robert Lighthizer had kicked off a 90-day consultation process with Congress and others over NAFTA.

Elaborating, Kalach said new products and materials in industries like carmaking and electrodomestic goods - sectors where Mexico runs a sizeable trade surplus with the United States - could be made with higher NAFTA content in the future.

Trump argues Mexico's surplus with the United States proves that the deal has hurt U.S. industry. Supporters of NAFTA say U.S. consumer demand has fueled the U.S. deficit and point out that the Mexican surplus has fallen since peaking a decade ago.

The deal underpins more than $1 trillion of trilateral trade.

U.S. Trade Representative Lighthizer said in Washington that NAFTA had been successful for U.S. agriculture, investment services and the energy sector, but not manufacturing.

Kalach said after Thursday's announcements it was still unclear exactly what the United States would seek in the renegotiation.

Thomas Donohue, head of the U.S. Chamber of Commerce, said in a statement on Thursday that the NAFTA renegotiation should do "no harm", and urged leaders to move quickly to avoid crimping investment and overly politicizing the talks.

(Editing by Frank Jack Daniel and Lisa Shumaker)

Tags: us, trade, trbc, usa
Open source
Read also:
Politico Politics 4 months ago
Share on Facebook Share on Twitter The Trump administration is expected to send to Congress on Thursday morning a final letter notifying lawmakers...
TIME Politics 4 months ago
(WASHINGTON) — Making good on a campaign promise, the Trump administration formally told Congress Thursday that it intends to renegotiate the North...
Reuters Lifestyle 4 months ago
Mexico's central bank is expected to keep its benchmark interest rate MXCBIR=ECI unchanged on Thursday after five consecutive hikes, on the back of...
Reuters Politics 4 months ago
Canadian Foreign Minister Chrystia Freeland said on Wednesday she would travel to Mexico next week to discuss renegotiating the North American Free...
NDTV News Lifestyle 4 months ago
The defence manufacturing sector has been categorised into two groups.New Delhi: The Defence Acquisition Council, or DAC, today finalised the broad...
Reuters Politics 4 months ago
Mexico will not accept tariffs or quotas in a renegotiated NAFTA, Foreign Minister Luis Videgaray reiterated on Friday, a day after the...
Reuters Politics 4 months ago
Mexico expects to import a record amount of yellow corn from Brazil this year after its livestock producers secured lower prices in deals with...
Reuters Politics 4 months ago
Mexico's government welcomed the upcoming renegotiation of the North American Free Trade Agreement (NAFTA) on Thursday after the Trump administration...
Reuters Politics 4 months ago
Companies no longer fear the North American Trade Agreement (NAFTA) will collapse and top U.S. multinationals in Mexico are committed to investing in...
One click to connect
Select a social network to associate your account