Seeking to improve understanding, communication, and cooperation between Mexico and the United States by promoting original research, encouraging public discussion, and proposing policy options for enhancing the bilateral relationship.
Vivien Azer, Cowen senior research analyst, discusses the prospective legalization of adult-use marijuana in Mexico with Bloomberg’s Joe Weisenthal, Romaine Bostick and Caroline Hyde on “Bloomberg Markets: What’d You Miss?” (Source: Bloomberg)
In April 2017, a group of Mexican executives filed into the Texas governor’s mansion in Austin for a meeting they hoped would help save a trillion-dollar trade deal.
They had a simple pitch for their audience – Republican Governor Greg Abbott, a handful of business leaders and some party donors: it would be in Texas’ best interest to preserve the North American Free Trade Agreement (NAFTA).
Abbott was just one of the prominent names on a list of dozens of American politicians and business executives that Mexico would carefully compile to help save NAFTA from the relentless attacks of U.S. President Donald Trump.
BUENOS AIRES, Argentina — President Donald Trump teamed up with the leaders of Canada and Mexico on Friday to sign a revised North American trade pact, a deal that fulfills a key political pledge by the American president but faces an uncertain future in the U.S. Congress. The celebratory moment was dimmed by ongoing differences over Trump’s steel and aluminum tariffs, as well as plans for massive layoffs in the U.S. and Canada by General Motors.
The U.S.-Mexico-Canada Agreement is meant to replace the 24-year-old North American Free Trade Agreement, which Trump has long denigrated as a “disaster.”
Trump appeared with Canadian Prime Minister Justin Trudeau and outgoing Mexican President Enrique Pena Nieto at the Group of 20 nations summit in Buenos Aires for the formal signing ceremony. Each country’s legislature must also approve the agreement.
BUENOS AIRES, Argentina — Argentina had hoped to show off its newly market-friendly economy to the world when the G-20 group of the world’s top economies begins its first South American summit this week. Instead it’s looking for help to avoid an all-out crisis.
The two-day meeting that starts Friday is meant to focus on development, infrastructure and food security, but most of the talk on the sidelines is expected to center on trade disputes between the U.S. and China and the signing of the new North American free trade deal.
Argentina, a darling of Wall Street just a year ago, finds itself hosting the summit while scrambling for international aid to fend off a collapse.
“The original vision for Argentina was to use the G-20 to showcase that it had transformed the economy, and instead it welcomes world leaders to the economic wreckage. So, the timing is inconvenient, to say the least,” said Benjamin Gedan, an Argentina expert at the Woodrow Wilson International Center for Scholars.
Scooped last night with Adam Behsudi, Alexander Panetta and Doug Palmer that the White House is looking to potentially do a ceremonial signing event of the new NAFTA deal (now known as the USMCA) in a Midwestern city ahead of the midterms. Such an event would be for show only as the deal can only be officially signed once 60 days have passed since the agreement. But it would allow the White House to formally declare victory and try to get some wider credit for a promise kept before voters head to the polls on Nov. 6.
But there are problems. Neither Canada nor Mexico are keen to take part in any such event as long as steel and aluminum tariffs remain. Some White House advisers wanted those tariffs removed once the three nations agreed to the USMCA. But Trump has not agreed to that. Two senior officials tell us that the tariffs could be replaced with “generous” quotas on steel and aluminum to help Canadian and Mexican leaders agree to such a signing event.
Or the event may never materialize. Nothing is finalized. But we are told it’s been discussed multiple times and political people in the White House are interested in making it happen.
The U.S. is boosting the size of a credit line available to Mexico in times of need, part of a largely symbolic display of close ties as the countries prepare to sign a new version of the North American Free Trade Agreement.
U.S. Treasury Department officials said Wednesday they would triple the size of a credit facility known as the exchange stabilization agreement, potentially allowing Mexico to borrow up to $9 billion, compared with $3 billion under a previous agreement when the original Nafta came into force. Mexico also has a $3 billion line with the U.S. Federal Reserve that isn’t expected to change.
The size of the credit program, which comes in the form of a temporary swap line, is small compared with Mexico’s economy. Mexico already has a so-called flexible credit line of up to $87 billion with the International Monetary Fund that hasn’t been used. Mexico has previously drawn on the Treasury credit program in the aftermath of its economic crisis known as the Tequila Crisis in the 1990s. Treasury officials say there is no current indication that emergency funding is needed in Mexico, which has $173 billion in foreign-currency reserves.
THE LOYALTY OATH NESTLED INSIDE THE NEW NAFTA: The fine print of the new trade agreement that the U.S. struck with Canada and Mexico includes a warning — one that the White House hopes will help the North American triumvirate unite against China.
Buried within the USMCA deal is a provision that requires any member of the pact to give three months’ notice to its partners if it launches negotiations with a non-market economy, which the United States considers China to be. The stipulation — which bears President Donald Trump’s fingerprints — means that if any of the North American countries enters into talks with China or another similar economy, the new three-way U.S.-Mexico-Canada deal can become a bilateral one.
It also means that when it comes to the growing trade war with China, the U.S. is seeking to keep Canada and Mexico on its side.