Trump to seek tariff ‘snap-back’ provision in NAFTA revamp

3/30/2017 Reuters

NAFTAThe Trump administration will seek changes to the North American Free Trade Agreement allowing it to reimpose tariffs if a flood of imports from Canada and Mexico causes “a threat of serious injury” to U.S. industry, according a draft document sent to Congress.

The administration also will seek to eliminate a requirement in the 23-year-old trade deal that anti-dumping and anti-subsidy disputes be settled via a special dispute panel. Some U.S. industries including lumber have complained that the mechanism is ineffective in stopping unfair subsidies.

The objectives are contained in a draft notification letter circulated by the U.S. Trade Representative’s office to members of Congress for review. The letter, seen by Reuters, is part of the legal process required to launch negotiations to revamp the NAFTA.

President Donald Trump called NAFTA a “disaster” throughout the 2016 election campaign, but the plan outlined in the letter would keep many of its provisions in place, including a settlement system for other disputes that circumvents local courts.

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Mexico’s governors tap investors in China, elsewhere

3/30/2017 Reuters

mexico-chinaMexico’s states are turning to Asia and beyond as some U.S. companies put investment plans on hold south of the border following President Donald Trump’s calls to bring jobs back home.

A delegation of three Mexican state leaders, headed by the National Confederation of Governors (Conago), traveled to China this week to meet with business leaders and discuss investment opportunities.

“Conago is developing an agenda with China’s provinces to build investment projects in our country,” Conago tweeted on Wednesday. “China and Conago agree on building bridges for business, not walls.”

Fears of a hit to foreign investment ran high when Ford Motor Co (F.N) canceled a $1.6 billion plant in Mexico’s central state of San Luis Potosi in January.

Trump, who had railed against U.S. manufacturers investing in Mexico, hailed the decision as a major victory, but Ford put it down to declining demand for small cars.

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Mexican, U.S. negotiators to resume sugar trade talks in Washington

3/28/2017 Reuters

Flickr/Coralie Ferreira

Mexican and U.S. trade representatives will resume talks in Washington aimed at resolving a sugar dispute between the two neighbors, Mexico’s top trade official said on Tuesday.

The talks focus on the late 2014 sugar accord regulating Mexican access to the U.S. market and come as ties between the two countries have frayed under U.S. President Donald Trump, who has pledged to overhaul the North American Free Trade Agreement.

Mexican Economy Minister Ildefonso Guajardo and his counterpart, U.S. Commerce Secretary Wilbur Ross, recently announced that sugar talks would resume, but did not set a date.

“The dialogue will continue this week among technical teams from (Mexico’s) economy ministry and Wilber Ross’ team,” Guajardo told reporters.

Quotas on Mexican sugar exports are set under the 2014 agreement that has become a source of tension between the two countries. The deal ended a year-long investigation by the U.S. government after U.S. farmers and sugar companies said Mexican millers were flooding the market with cheap, subsidized sugar.

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Carlos Slim teams up with Chinese to focus on Mexican market

3/27/2017 Financial Times

CarlosSlimCarlos Slim’s Giant Motors will begin manufacturing cars in Mexico in a joint venture with China’s JAC Motors as they focus on the Latin market.

This comes as some car makers have fallen foul of Donald Trump’s “America first” policies because they manufacture in the low-cost nation.

Two Chinese-designed and largely Chinese-manufactured sport utility vehicles will be launched on Tuesday as the new venture aims to cash in on Mexico’s booming domestic car market.

Giant Motors, the Mexican vehicle assembler backed by the billionaire investor, will focus on domestic sales and exports to the south with the new venture, instead of looking north to the US.

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Renegotiate Nafta? Mexicans Say Get On With It

3/25/2017 New York Times

NAFTAMEXICO CITY — For more than two decades, free trade has been at the heart of Mexico’s relationship with America, responsible for pumping a stream of vehicles, audio components and avocados north and cheap corn, cattle and software south.

To the nation’s leaders, it was central, vital, nonnegotiable. At least until President Trump came along, promising to upend nearly $500 billion in annual trade between the two countries if it could not be re-engineered more in America’s favor.

Now, the Mexico’s leaders have a new priority: urging their American counterparts to hurry up and get on with it.

While free trade has long been an article of faith in Mexico, uncertainty over the fate of the North American Free Trade Agreement is hitting the country hard.

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Trump’s U.S. jobs push may open doors to China in Mexico: ICBC bank

3/24/2017 Reuters

ChinaU.S. President Donald Trump’s push to force U.S. industry to bring jobs home is opening investment avenues for Chinese companies in Mexico, an executive with Industrial and Commercial Bank of China (ICBC), the country’s largest lender, said on Friday.

Fears of a hit to foreign investment ran high when Ford Motor Co (F.N) canceled a $1.6 billion plant in Mexico’s central state of San Luis Potosi in January.

Trump, who had railed against U.S. manufacturers investing in Mexico, hailed the decision as a major victory, but Ford put it down to declining demand for small cars.

Yaogang Chen, head of ICBC’s (601398.SS)(1398.HK) Mexico unit, said U.S. industry’s loss could be China’s gain.

“If some U.S. investment projects don’t (happen), there has to be somebody to invest. … If Chinese companies think it is profitable, they will invest,” he said in an interview on the sidelines of a banking conference in the resort of Acapulco.

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Mexico seeking opportunities to tap debt markets

3/24/2017 Reuters

4350685550_dbd28c7e50Mexico is closely looking for windows of opportunity to issue more debt and improve its loan portfolio, Finance Ministry Undersecretary Vanessa Rubio said in an interview on Thursday.

Mexico last week announced a new $3.15 billion 10-year bond issue, its first transaction in the dollar bond market this year. This follows a bounce in emerging market assets following relatively dovish talk by Federal Reserve head Janet Yellen.

“Our debt issuances in international debt markets have been highly valued and we’re not obligated to issue any more because our debt requirements have been met,” Rubio told Reuters on the sidelines of a banking conference in the seaside-resort city Acapulco. “Still, we’re monitoring market conditions to see if there are windows of opportunity to take advantage of to improve our position.”

Mexican issuers had stayed clear of the dollar market in 2017 as heated rhetoric over U.S. President Donald Trump’s trade policies pummeled both the peso and debt prices.

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