Mexico: We won't roll over. Leaders answers critics with tougher tone on NAFTA talks
Under pressure to stand up to the Trump administration and defend Mexico’s auto industry, Mexican officials may be willing to add something new to talks on the future of the North American trade: everything.
“We also know that Mexico is an important country for the U.S. on security issues, on combating organized crime, preventing terror and, of course, cooperating on immigration,” Foreign Minister Luis Videgaray told Mexican senators in testimony last week. “All matters are on the table simultaneously.”
Videgaray dubbed the policy “integrality.”
Whether the Mexican gambit will sway Trump administration officials during the renegotiation of the North American Free Trade Agreement is another matter. But it shows that Mexican officials have recovered from the shock of Trump’s presidential win and are trying to gain some leverage in the high-stakes talks.
And Mexico has levers it can pull. For example, Mexico is refusing U.S. efforts to deport non-Mexicans to its territory, Videgaray said. That complicates U.S. efforts to remove Central American undocumented workers quickly.
Some opposition senators are also calling on the Mexican government to end the practice of deporting Central Americans crossing its southern border, and to allow the migrants to head toward the U.S., as a response to Trump’s plans to build a border wall and renegotiate NAFTA.
Trump has said that NAFTA is overly generous to Mexico, hurting U.S. workers. He has cited Mexico’s large trade surplus and singled out the Mexican auto industry as a target in his bid to bring back manufacturing jobs to the U.S.
The tougher Mexican posture comes as opposition parties criticize the administration of President Enrique Pena Nieto as overly diplomatic with U.S. officials. Pena’s approval rating has been under 20 percent in recent weeks, according to several polls.
Mexico holds general elections next year, and polls show the early front-runner is leftist firebrand Andres Manuel Lopez Obrador, whose prospects have been buoyed by growing nationalism in response to Trump.
Videgaray insisted in his Senate testimony that the government is standing up to Trump.
“Don’t confuse the lack of stridence with the lack of strategy,” he said. “The president of Mexico and his government are facing a historic challenge with clarity.”
Economy Minister Ildefonso Guajardo, who is also the chief trade negotiator, said recently that Mexico is prepared to walk away from NAFTA if the U.S. insists that tariffs be written into the trade pact. Guajardo also rejected export quotas.
The minister offered some insight into the government’s strategy in a speech in Detroit last week and in earlier interviews with broadcasters in Mexico. The talks, he said, would start in June at the earliest and could be wrapped up in six months or so.
Mexico could be willing to include measures that might shrink its trade surplus with the U.S. as long as it comes from an increase in bilateral commerce and not a decrease, Guajardo said.
“We have to appreciate what we have already working with us,” Guajardo told the gathering in Detroit. “Any negotiator in the world would not sit down at a table thinking they are the only one that is going to be winning.”
He added: “There is no way that I can go back to Mexico without an agreement that represents the advancement of Mexico.”
In the worst-case scenario of a NAFTA exit, Mexico would find refuge in the rules of the World Trade Organization, Guajardo said in Mexico.
Under those rules, the U.S. could impose a maximum tariff on cars of 2.5 percent and on pickup trucks of 25 percent.
Because Mexico is classified as an emerging market under WTO rules, it would generally face lower tariffs on its exports to the U.S. than Mexico would face on its imports from the U.S., he said.