2024 RT Amination Banner.gif

China Daily

News> World> Content
Friday, May 25, 2018, 10:39
Mexico says will not renegotiate NAFTA under pressure
By Reuters
Friday, May 25, 2018, 10:39 By Reuters

In this June 30, 2017 photo, Mexican President Enrique Pena Nieto speaks during the opening ceremony of the XII Pacific Alliance Summit in Cali, Valle del Cauca Department, Colombia. (LUIS ROBAYO / AFP)

MEXICO CITY / WASHINGTON - Mexico will not buckle to pressure to conclude the long-stalled renegotiation of NAFTA, President Enrique Pena Nieto's spokesman said on Thursday, but a source said the country made a new offer after the United States launched a probe exploring auto tariffs. 

Differences over how to reconfigure the auto industry have slowed progress on talks to rework the 23-year-old North American Free Trade Agreement that underpins Mexico's economy, with Mexico showing some flexibility but refusing to completely meet US demands. 

On Wednesday, US President Donald Trump's administration said it would examine whether car and truck imports from around the world harm its auto industry, a move that may lead to new tariffs on exports to the world's second-largest auto market. 

If an agreement is reached, it will be one that truly benefits Mexico. If these conditions don't exist, Mexico will not move forward

Eduardo Sanchez, Spokesman of Mexcio President Enrique Pena Nieto

One Trump official said the investigation was partly aimed at yielding NAFTA concessions from trade partners Mexico and Canada. 

"Mexico is not going to negotiate on the basis of pressure, Mexico is very clear about what works and what doesn't work for us," said Pena Nieto's spokesman, Eduardo Sanchez. 

"If an agreement is reached, it will be one that truly benefits Mexico. If these conditions don't exist, Mexico will not move forward," he added. 

Canadian Prime Minister Justin Trudeau on Thursday also said Washington was using the auto tariff probe as a negotiating tool. 

However, Mexico made a new offer on autos "showing some flexibility" on Thursday, following the US announcement of the national security probe into car imports, a person familiar with the talks said. It was not immediately clear if the offer encompassed other areas under negotiation. 

The three sides are in constant contact, including phone calls between ministers, and further talks were likely over the weekend, the person said. 

Mexico has in recent days responded to US proposals with an offer that 20% of any auto made in North America would be produced in high-wage areas, a Mexican industry source briefed on the talks said. It was not immediately clear in what areas Mexico had shown further flexibility on Thursday. 

The United States wants 40% of auto content to come from areas paying at least US$16 hour. 

Mexico has also proposed that 70% of overall content of a vehicle made in North America come from the region, countering a US proposal of 75% for high-value parts. 

Mexico and Canada have long demanded that the United States drop some of its most contentious ideas, including a so-called "sunset clause" to make NAFTA automatically expire if it is not renegotiated every five years. 

ALSO READ: Mexico says NAFTA deal unlikely this week, Canada is upbeat

Mexico's economy ministry did not respond to a request for comment. Chief trade negotiator Kenneth Smith took to Twitter on Thursday to defend NAFTA's role in expanding the US auto sector, saying US output grew 124% since 2009. 

Trump ordered the renegotiation of NAFTA to meet a campaign promise to bring more manufacturing jobs to the United States. The nine-month long talks are now bogged down by differences over auto production. 

Once again courting voters in the US industrial heartland, this time ahead of mid-term elections later this year, Trump says NAFTA has killed US jobs and has threatened to scrap the deal. 

Japan's foreign minister, Taro Kono, told reporters in Mexico City on Thursday that his Mexican counterpart, Luis Videgaray, had promised to protect the interests of Japanese firms in NAFTA talks. 

"He repeated that he would protect the interests of Japanese companies, for which we are very grateful," Kono said. Major Japanese auto makers including Toyota Motor Corp and Nissan Motor Co Ltd have sizeable operations in Mexico. 

READ MORE: Negotiators fail to reach NAFTA deal

Share this story