Election of new Mexican president adds more uncertainty to NAFTA talks
By Teresa WrightIndustry Government Manufacturing bilateral government manufacturing NAFTA Obrador tariffs trade
Add Trump's inflammatory rhetoric and trade tensions with Canada, NAFTA talks may be in long-term limbo.
OTTAWA — The future of the North American Free Trade Agreement (NAFTA) negotiations was injected with a new dose of uncertainty with the election of a new president in Mexico on July 1.
Following his overwhelming majority win, Mexico’s president-elect Andres Manuel Lopez Obrador said he supports reaching a deal on renegotiating NAFTA with the United States and Canada.
But the NAFTA talks have been stalled for several weeks and Lopez Obrador enters the scene as tensions between Canada and the United States have intensified as the two countries have become embroiled in a trade dispute.
After the election, Lopez Obrador said he’ll propose that his own team of experts be included in the trade talks. The winning candidate said he will make that proposal in a meeting Tuesday with current President Enrique Pena Nieto.
Lopez Obrador told the Televisa network that he will respect the current team of negotiators, and let them continue representing Mexico until he takes office Dec. 1, noting that he wants to have information on what’s being discussed and “to help as much as we can.”
Prime Minister Justin Trudeau has said he plans to stay in touch with the outgoing Mexican president, but hopes to work closely with the country’s new president to “build on the vibrant partnership between our two countries.”
But with Trump’s inflammatory rhetoric, Canada’s retaliatory tariffs against the U.S. and a leftist, anti-establishment Mexican president about to join the fray, there are some who believe any North American Free Trade Agreement talks may be in long-term limbo.
On July 2, a day after Canada’s counter-tariffs came into effect, White House press secretary Sarah Sanders said escalating the tariffs “does nothing to help Canada and only hurts American workers.”
“We’ve been very nice to Canada for many years and they’ve taken advantage of that,” Sanders said during her daily press briefing in Washington.
“The president is working to trying to fix the broken system and he’s going to continue pushing for that.”
The Trump administration has accused Canada of being a national security threat when it slapped tariffs on Canadian steel and aluminum in June. Canada has retaliated with $16.6 billion in counter-tariffs and the U.S. midterm elections are in the fall. These are all factors that point to a stalemate, said Moshe Lander, an economist at Concordia University.
“I don’t see how (Trudeau) is going to get this done,” he said.
“I don’t see how he’s going to be able to find an agreement that’s going to be acceptable to, now, a left-wing populist, a right-wing populist and our country who is claiming hurt feelings as a basis for negotiations. I think NAFTA is dormant for the next six to 12 months.”
Trudeau had been working closely with Pena Nieto on NAFTA and spoke with him about the deal just ahead of the elections on Friday. During this conversation, they “reaffirmed the close friendship” and agreed to continue working toward a mutually beneficial outcome on the trade agreement, a read out of the conversation from the Prime Minister’s Office said.
Now, Trudeau is reaching out to the new president in the hopes of maintaining a united approach with Mexico when talks do resume with the United States.
“Canada and Mexico are close friends and longtime partners. We share common goals, strong people-to-people ties, and a mutually beneficial trading relationship that is the envy of the world _ reflected in our joint effort to update the North American Free Trade Agreement for the 21st century,” Trudeau said in a statement congratulating Lopez Obrador on his win.
Trudeau later spoke with Lopez Obrador on Monday, wherein they discussed their mutual trade interests and their “shared priority of updating the North American Free Trade Agreement for the betterment of their peoples,” said a readout of the conversation issued Monday.
Donald Trump also congratulated Lopez Obrador on his electoral win, however, the U.S. president also said in an interview this weekend he intends to hold off on signing a new NAFTA deal until after America’s fall midterm elections.
Files by The Associated Press.