Why a Newly Confident Mexico Is in No Rush to Renegotiate NAFTA

2/24/2017 Fortune Magazine

DonaldTrumpPinataMexico is increasingly confident that U.S. President Donald Trump will not be able to impose harsh barriers on imports anytime soon, and officials signaled they may hit their northern neighbor’s most trade-sensitive districts in case he does.

Trump wants to renegotiate the North American Free Trade Agreement with Mexico and Canada, but talks cannot begin until he triggers a 90-day notice period by informing Congress. Nominees for several important U.S. posts including trade representative and agriculture secretary have not yet been confirmed.

“As long as our counterparts in Washington don’t define their objectives … today NAFTA regulates trade, so we are not in a hurry to change anything,” Economy Minister Ildefonso Guajardo said at an event on Thursday.

The view of some Mexican officials and business leaders that the U.S. Congress, Supreme Court and some state governors are counterweights to Trump has also been reflected in markets, with the peso rallying in recent days to its strongest since Trump’s election in November.

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On NAFTA and Mexico, Trump Faces a Balancing Act

2/22/2017 U.S. News & World Report

via AP – Dario Lopez-Mills

President George W. Bush’s former commerce secretary acknowledged Wednesday that the North American Free Trade Agreement “should be updated,” but said that abandoning the deal entirely and antagonizing Mexico may amount to a temporary “tactical victory” that down the road would be remembered as a “strategic defeat.”

Carlos Gutierrez, who opened a panel discussion Wednesday hosted by the Atlantic Council in Washington, avoided criticizing President Donald Trump’s administration directly. But the onetime CEO of the Kellogg Co. warned that hard-line approaches to NAFTA and to America’s broader relationship with Mexico have elicited “anxiety” and anti-U.S. sentiment from America’s southern neighbor.

“I think what we need to understand – and I trust that our government here in the U.S. will understand this – we cannot humiliate a country to the bargaining table,” Gutierrez said. “Maybe in business you can, because it’s all about the bottom line. But you can’t quantify national pride. You can’t quantify national dignity, and that’s what’s at stake here. It’s going to be extremely difficult for Mexico to do anything but take a combative response.”

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Trump Trade Threat Is New Opening for Tighter Mexico-China Ties

2/21/2017 Bloomberg

mexico-chinaMexico is in for some painful restructuring if U.S. President Donald Trump follows through with his protectionist threats.

But the nation also faces a unique opportunity to reduce its reliance on its American neighbor and shift its focus to the world’s No. 2 economy, China.

Mexico has some key advantages, despite all the doom and gloom since Trump’s election, according to Natixis SA in Hong Kong.  The peso has depreciated 26 percent over the past two years, making Mexico’s goods more competitive; the country has undertaken past structural reforms on labor, energy and telecoms; and it has free trade agreements with 44 countries outside the U.S.

Now it’s time for Mexico to woo China, Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis, said in a report.

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With NAFTA in Trump’s crosshairs, Mexico’s border factories brace for the unknown

2/21/2017 The Washington Post

maquiladora1EL PASO — If you sleep on a memory foam mattress, chances are good that its fabric cover was made here in a small factory in this desert border town on the westernmost edge of Texas.

Well, here and over there, across the Rio Grande in Ciudad Juarez, a Mexican city where pieces of fabric cut in El Paso are stitched together and shipped back across the border. The supply of cheap labor in Mexico has fueled the rise of manufacturing plants dotting the border known as maquiladoras.

The journey of this mattress cover, from El Paso to Ciudad Juarez and back, illustrates the far-reaching tentacles of free trade and its impact on the border economy and across the United States. It’s a journey now fraught with tension as President Trump moves to renegotiate — or even unilaterally withdraw the country from — the 23-year-old North American Free Trade Agreement (NAFTA), which has allowed maquiladoras to flourish but which Trump and some Rust Belt communities blame for the loss of U.S. manufacturing jobs.

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[Video] Charting a New Course Part 1: U.S.-Mexico Economic Interdependence

The Wilson Center’s Mexico Institute has released a series of new essays covering a range of important bilateral issues. We kick off our companion video series, “Charting a New Course,” with a focus on economic interdependence. Mexico Institute Deputy Director, Chris Wilson provides an overview of the scope and depth of U.S.-Mexico economic cooperation and also talks about what can be done to make the alliance stronger. That’s the focus of this edition of Wilson Center NOW.

Watch the video…

Why Ditching NAFTA Could Hurt America’s Farmers More Than Mexico’s

2/16/2017 NPR

via Flickr – Mike Mozart

Garland Reiter is one of the people behind the rise in imported food from Mexico.

His family has been growing strawberries in California for generations and selling them under the name Driscoll’s. Today, it’s the biggest berry producer in the world.

In the early 1990s, the Reiter family started growing strawberries and raspberries in Mexico, in addition to California. It found regions in Mexico where the climate allowed them to grow the fruit — especially raspberries — during seasons of the year when it hadn’t been feasible back home. “Our move really was for year-round product, and quality,” says Reiter, who is executive chairman of Reiter Associated Cos.

The North American Free Trade Agreement went into effect at that same time, in 1994. But that’s coincidence, Reiter says; NAFTA had very little to do with the move into Mexico. “To tell you the truth, we paid minimal attention to that,” he says.

Trade With Mexico Is Great

2/16/2017 U.S. News & World Report

Oil barrelsThe most shameful aspect of the U.S.-Mexico trade imbroglio – ignored in analyses of the North American trade agreement and immigrants arriving illegally in the U.S. – is that it’s a big fuss over something that actually generates significant economic benefits and jobs for both countries. This is the economic reality that no protectionist, mercantilist rhetoric about saving some American jobs can disguise.

As much as we might hear politicians, pundits and the media complain about the U.S. trade deficit, we have a lot to be thankful for. When you peel back the rhetoric and get to the data, the numbers tell an important economic story about the substantial benefits of international trade.

It doesn’t seem to matter to those waving the protectionist banner that millions of American jobs are directly tied to trade with Mexico, and that there is evidence that growth in U.S. exports of oil and natural gas to Mexico is driving increased energy production here in the U.S. Trade with Mexico has benefited the U.S. economy and generated a large number of jobs in U.S. oil and gas fields. Mexico is second only to Canada in energy trade with the U.S.

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