The US is running a trade deficit with its southern neighbour of more than $63 billion.
MIAMI — Mexico’s foreign minister says the country is “inevitably” set to review rules of origin when renegotiating the North American Free Trade Agreement, giving a boost to President Donald Trump’s manufacturing push.
Foreign Relations Secretary Luis Videgaray said at an event in Miami that NAFTA has allowed Mexican industry to enter the US market with lax rules of origin. The rules dictate how much US content a product assembled in Mexico must have in order to escape tariffs when being imported into the US. Currently set at 62.5% for the auto industry, that number could increase.
“One part that must inevitably be reviewed is the chapter on rules of origin,” Videgaray said at the University of Miami. “Over time, the free trade agreement has sometimes been used, not always of course, but sometimes as a way to access the US market perhaps with laxity in some ways of rules of origin.”
The Trump administration told Congress earlier this month there would be 90 days of consultations on the renegotiation of the 23-year-old pact before beginning talks with Canada and Mexico. Annual trade of goods between Mexico and the US was at $525 billion in 2016, with the US running a trade deficit of more than $63 billion.
The foreign minister said Mexico won’t entertain any talks on building a wall along the border. Videgaray maintained it is seen as an unfriendly sign and questioned its efficiency.
Trump’s budget seeks $2.6 billion for border security technology, including money to design and build a wall along the southern border. Trump repeatedly promised voters during the campaign that Mexico would pay for a wall.