10/17/2018 – Wall Street Journal
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.
POTUS got a much-needed win on trade.
NAFTA HOT SEAT — What a day to talk trade. Tune in at 8 a.m. ET today to catch the livestream of our conversation with Canada’s U.S. ambassador, David MacNaughton, to celebrate the launch of Pro Canada. This is happening as the U.S. and Canada hurtle toward a self-imposed U.S. deadline this week to reach a NAFTA deal, with both sides sounding gloomy about the prospects. Even if there is an agreement, there’s a risk it could turn into a high-stakes flashpoint between the White House and Congress. Pro Trade’s Megan Cassella reports for Pro Canada subscribers how Democrats could be the Trump administration’s next NAFTA hurdle if they seize control of the House in the November midterms.