[OTTAWA] Canada’s trade minister on Monday signalled that the government will push ratification of the Trans Pacific Partnership quickly through parliament, as stalled North American free trade talks have raised concerns it could lose its privileged access to the US market.
«Rapid ratification of the TPP» will mean «farmers, ranchers, entrepreneurs and workers across the country can finally tap into new markets,» trade minister Jim Carr said in a speech to parliament.
Signed in March without the United States, the Trans-Pacific Partnership will come into effect 60 days after ratification by at least six of the 11 signatories – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The trading bloc represents 500 million consumers and 13 percent of the world’s economic output.
Ottawa wants to be among the first six TPP signatories, but is facing pushback from the powerful union representing Canadian auto workers. Unifor wants stricter labour standards written into the pact and for negotiations with the United States and Mexico to revamp the North American Free Trade Agreement completed first.
High-level talks ended last week with no deal, and no date has been set yet for Canada’s foreign minister Chrystia Freeland to return to Washington to continue negotiations.
For Canada, implementing the TPP is «of paramount importance,» said Mr Carr, if only to act as a counterbalance to growing US protectionism under US President Donald Trump, who has threatened to cut Canada out of a new continental trade deal if Ottawa didn’t give in to his demands.
«This is not just a new trade agreement for Canada, it is also a message we send to the rest of the world: trade is important, the rules are important and we will not give in to protectionism,» the minister said.
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WASHINGTON — Canada’s foreign affairs minister says Tuesday’s anniversary of the 9/11 terrorist attacks on the United States should serve as a reminder of the deep ties between the two countries as they haggle over the future of North American free trade.
Chrystia Freeland underlined the anniversary at the start of another day of trade talks aimed at breaking an impasse on a renewed North American Free Trade Agreement.
The renegotiation of the 24-year-old NAFTA, which also includes Mexico and is integral to the continent’s economy, has dragged on for 13 months.
The in-person, high-level negotiations got back underway as events marking the 17th anniversary of the 2001 attacks took place around the U.S., including at the Pentagon with Vice President Mike Pence, not far from where the trade meetings are taking place.
Freeland said the memorials should help to add some context to the ongoing negotiations on free trade that were started at Trump’s behest.
“Maybe that helps us all put into perspective the negotiations that we’re having — and also put into a little bit of historical perspective the importance and the significance of the relationship between Canada and the United States,” Freeland told reporters outside the offices of her counterpart, U.S. Trade Representative Robert Lighthizer.
“At the end of the day we’re neighbours, and at the end of the day, neighbours help each other when they need help.”
Freeland and Lighthizer left the bargaining table Friday without a deal following two weeks of negotiations. She said she spoke with Lighthizer over the weekend and they agreed it would be useful for them to meet again face to face.
“The conversations over the weekend continued to be constructive and productive,” she said.
Freeland will spend Tuesday in the U.S. capital before she heads to Saskatoon to attend Liberal caucus meetings that begin later in the day and run through Thursday.
Lighthizer spent Monday in Brussels for trade discussions with the European Union — preliminary talks that are scheduled to resume later this fall.
Ottawa and Washington are trying to reach an agreement that could be submitted to the U.S. Congress by month’s end. A deal would see Canada join a preliminary trade agreement the Trump administration struck last month with Mexico.
The two sides have so far been unable to resolve their differences over U.S. access to the Canadian dairy market, a cultural exemption for Canada and the Chapter 19 dispute resolution mechanism.
A Canadian source with knowledge of the NAFTA discussions says an agreement is within reach, but getting there will require flexibility from all sides.
Prime Minister Justin Trudeau said during an interview Tuesday with a Winnipeg radio station, CJOB, that there are certain positions Canada has and remain firm on. But he said the Liberals plan to be flexible on other issues in order to get a deal.
“It’s time to update this deal after 25 years. We’re just going to stay working constructively to get to that win, win, win that we know is there,” he said in the interview.
There is another wild card in Washington: hurricane Florence, a monster Category 4 storm that’s bearing down on the U.S. east coast and is sure to make its presence felt in the national capital area later in the week.
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Last week heralded further woes for the Indian economy as the rupee touched its lowest-ever-level of 71 against the dollar. At the same time, GDP forecasts stood at an all-time-high of 8.2% in 2018-19’s Q1. On the other side of the world, the US and China agreed to overhaul the NAFTA deal, bringing relief to the dollar. Read on to know more about what’s been up in the economy, outside and at home:
Indian Rupee slides to record-low at 71 against the greenback
On Friday, the rupee hit an all-time-low at 71 against the US dollar. The primary reason identified behind the drastic drop is persistent demand for the dollar amid rising crude oil prices. This is further reinforced by weak exchange rates of almost all Asian peers of the rupee. Per Forex dealers, the dollar’s strength against its rival currencies on expectations of rising interest rates amid lingering Sino-US trade tensions also weighed on the Indian fiat. To add to all these factors is the growing fear about rising inflation and consistent outflow of foreign funds from the domestic equity market.
“[The] Indian rupee has depreciated around 11 per cent year to date. Higher crude oil prices, demand from defence and oil marketing firms have contributed to the latest bout of weakness. Rupee was overvalued on trade weighted real effective exchange rate. Robust FDI flows in e-commerce companies, healthy forex reserves may limit the downside of the rupee”, said VK Sharma, Head Private Client Group & Capital Market Strategy, HDFC Securities.
US dollar steady post US-Mexico agreement to overhaul trade deal
After the United States and Mexico agreed to overhaul the North American Free Trade Agreement (NAFTA), volatility in the dollar cooled down; the currency is now steady against the euro and a basket of other major currencies. The overhauling of the deal brought optimism amidst global trade tensions.
The agreement to overhaul NAFTA exerted pressure on Canada to consent to new terms with the aim of preserving a three-nation pact.
“[The deal] would be positive for the Canadian dollar, Mexican peso, these currencies that have been sold on the back of higher trade tensions,”, said Shusuke Yamada, currency and equity strategist at Bank of America Merrill Lynch in Tokyo. “Overall, that would be negative for the Japanese yen and the US dollar. That’s positive for the risk assets in general,” he added.
On Tuesday, following two sessions of losses, the dollar index, which gauges the fiat’s performance against six other currencies, fell nearly flat. Later, it edged 0.05% higher to 94.834, making up for the earlier losses.
Ever since it hit a high on August 15, the dollar has fallen more than 2%. This comes amidst US President Trump’s criticism of the Federal Reserve for raising interest rates while the US government attempted to boost the economy.
India poised to become world’s fifth-largest economy in 2019
Finance Minister Arun Jaitley, on Thursday, said that India is expected to outstrip Britain to don the title of the world’s fifth-largest economy in 2019.
“This year, in terms of size, we have overtaken France. Next year we are likely to overtake Britain. Therefore, we will be the fifth largest [economy],” he asserted. Further, he said that the other economies of the world were growing at a much slower rate, adding that India had the potential to rank among the top three economies of the world within a span of 10-20 years.
India’s GDP growth at 8.2% in Q1 of 2018-19
In the first quarter of the 2018-19 fiscal year, ending June 30, India’s economy performed at an impressive rate of 8.2%. This marks India’s highest growth rate since the first quarter of 2016. Gross Domestic Product (GDP) growth was backed by a strong core performance and a healthy base.
These growth figures will be factored in by the monetary policy committee at its next review, which is scheduled for October 3-5.
The sectors of the economy that registered a growth of over 7% include ‘manufacturing, electricity, gas, water supply and other utility services’, ‘construction’, and ‘public administration, defence and other services’.
Foodgrain output to reach new heights in 2017-18
Foodgrain production in India is expected to grown to an all-time-high of 284.83 million tonnes in the 2017-18 crop year, which ended in June. According to the Agriculture Ministry, this burst in output is fuelled by record production of wheat, rice, coarse cereals and pulses after a normal monsoon cycle.
The previous record was pegged at 275.11 million tonnes, in the 2016-17 crop year.
In the Ministry’s fourth advance estimate released on Tuesday, it revised, in the upward direction, the total foodgrain production by 5.3 million tonnes from the earlier projection of 279.51 million tonnes for the current crop year.
“As a result of near normal rainfall during monsoon 2017 and various policy initiatives taken by the government, the country has witnessed record foodgrain production in 2017-18,” the ministry said in a statement.
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That sound of ice thawing? It’s the Trump administration’s tentative deal with Mexico to rewrite the controversial Nafta free-trade pact, the first clear evidence the White House is willing to compromise on its hardline demands and avert ruinous trade wars.
News of the deal sent U.S. markets surging Monday. The Nasdaq Composite IndexCOMP, +0.17% topped 8,000 points and the S&P 500 SPX, +0.06% index almost hit 2,900, both touching record highs. The Dow Jones Industrial AverageDJIA, +0.15% jumped nearly 260 points to surpass 26,000.
Details of the pending agreement are sketchy for now. Senior White House officials suggested the new pact would result in more new cars and trucks being made in the U.S. using steel and other materials produced in North America. That was one of President Donald Trump’s chief goals.
Other key provisions could lead to higher wages for Mexican auto workers and even give them greater rights to unionize, moves meant to reduce the incentive for U.S. automakers to shift operations south of the border due to lower labor costs.
The new agreement also puts greater emphasis on crafting rules to govern the “digital economy” and protect copyrights and intellectual-property rights, areas in which the U.S. is a global leader.
“I think this is an extremely historic time,” said Robert Lighthizer, the chief U.S. trade negotiator, in a call with reporters. “We had a Nafta agreement that got seriously out of whack … and needed modern updating.”
A deal is far from done, of course. Canada is the third country that was party to the original North American Free Trade Agreement signed in 1994, but negotiations have been at a standstill. The White House hopes Canada will now rejoin the talks and quickly join with the U.S. and Mexico to ratify a successor agreement to Nafta.
“We hope that Canada can join in now,” Lighthizer told reporters Monday. Talks are expected to resume soon, and at this point, it’s unlikely that any Nafta successor would be voted upon until the next Congress convenes in early 2019.
The Canadians and no doubt the Europeans and Chinese are likely to comb over the details of the agreement. The U.S. is sure to use the deal with Mexico as a template for negotiations in talks with other countries to update trade rules that Trump has long complained are unfair.
What the Mexico deal also shows, though, is the Trump administration is ready to compromise on some of its toughest demands. The U.S., for instance, dropped its insistence on a hard “sunset” clause that would cause the trade deal to expire after a certain number of years.
“Despite the Trump administration’s intransigence over trade disputes in recent months, it is willing to negotiate in good faith and accept a compromise, which will be welcomed in both China and Europe,” contended Paul Ashworth, chief U.S. economist at Capital Economics.
The new pact calls for the U.S. and Mexico to review an updated North American free-trade deal six years into a 16-year window. The countries could extend the pact another 16 years at any point after that six-year period.
The U.S. also appears to have softened its demand for an end to an arbitration process for determining if a country was violating the trade agreement. Industries in the U.S. mostly support the current process for resolving problems and lobbied the White House to back off.
Yet even if the agreement is not entirely what the White House wanted, the deal with Mexico allows Trump to claim partial victory for his “America First” policy.
What’s more, the deal will go a long way in easing tensions on Wall Street and in Washington that Trump’s tough talk on trade would ignite a conflagration damaging to economies all around the world.
Major industry lobbying group and trade experts were cautiously optimistic after the White House deal.
It’s “a victory for rationality over rhetoric,” said Steve Nelson, a partner at the law firm Dorsey & Whitney and a former state department lawyer.
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Mexican President Enrique Peña Nieto and his once-fierce rival, President-elect Andres Manuel Lopez Obrador, on Monday pledged cooperation in confronting the nation’s challenges despite differences on issues such as education reform and a controversial airport project.
Peña Nieto and Lopez Obrador — along with many current Cabinet members and the president-elect’s designated ministers — appeared together at the National Palace downtown and stressed themes of mutual respect.
It was the latest in a series of gestures meant to demonstrate stability and continuity as leftist Lopez Obrador prepares to assume power amid pledges for a far-reaching “transformation” of Mexican society. Peña Nieto has faced widespread unpopularity and the perception that he has been an ineffective leader.
“It is an institutional transition but it is also a respectful transition because we have received help without conditions from the constitutional president, Enrique Peña Nieto,” said Lopez Obrador, who won the presidency after losing in the two previous national elections, in 2012 and 2006.
Peña Nieto, in turn, vowed to do all he could to ensure that “the next government begins its term in a successful fashion.”
Lopez Obrador, elected July 1 in a landslide, is scheduled to take office Dec. 1 for a single six-year term. Peña Nieto was not a candidate in the election as Mexican law bars reelection of presidents.
The two men Monday answered a half dozen questions from the press but didn’t veer from differences on a number of contentious issues — notably national education reform and a planned new multibillion dollar airport for Mexico City.
Lopez Obrador reiterated his vow to review the controversial airport plan — critics say it is too expensive and not needed — and to rescind the current administration’s education overhaul blueprint. The president-elect has said he will seek out views from all sectors on how to improve the nation’s moribund public education system and what to do about the airport proposal.
Education reform was a centerpiece of Peña Nieto’s administration, but it drew fierce criticism from teachers opposed to revised rules to evaluate teacher performance. The new airport, already under construction, was the major infrastructure project of the outgoing administration.
Lopez Obrador and Peña Nieto met July 3, two days after the election, but that was a one-on-one meeting before Lopez Obrador had been legally declared president-elect.
Despite many preelection fears of an economic slide after a Lopez Obrador victory, Mexico’s economy has remained stable and the peso has retained its value against the U.S. dollar and other currencies. The incoming president has vowed to revitalize the sluggish Mexican economy, but has provided few specifics beyond a broad anti-corruption push.
Since election day, Lopez Obrador has generally toned down his often fiery rhetoric— he campaigned relentlessly against what he labeled “mafia of power,” including Peña Nieto’s administration — and has met repeatedly with investors and business interests.
The president-elect has also reached out to Washington and said he would invite President Trump to his inauguration.
U.S.-Mexico relations have experienced turbulence since Trump took office and repeatedly criticized Mexico and Mexicans.
Negotiations are continuing between the United States, Mexico and Canada in crafting a new North American Free Trade Agreement, the three-nation accord that has governed commerce on the continent for almost a quarter century. Trump has assailed the pact as unfair to U.S. interests.
The free-trade regimen is a cornerstone of the Mexican economy. Almost 80% of the nation’s exports go to the United States. Peña Nieto and Lopez Obrador have voiced support for a new trade accord.
Lopez Obrador, who ran on a leftist populist campaign vowing fundamental change, won 53% of the vote, defeating his nearest challenger by more than 30 percentage points. He has vowed to increase social-welfare payments to the poor, make higher education available to all and eliminate deep-rooted corruption.
Lopez Obrador is the first Mexican president to take office with a majority vote since 1988, during the days of dominance by the country’s Institutional Revolutionary Party, known as the PRI.
The PRI’s more than seven-decade hold on the presidency ended in 2000, with the election of Vicente Fox of the right-of-center National Action Party. But Lopez Obrador is the first avowed leftist and first contender from a non-traditional party to be elected president in the 21st century.
Peña Nieto is the current standard-bearer for the PRI, which suffered a humiliating defeat in the July 1 elections.
Lopez Obrador is among a number of left-leaning politicians who abandoned the PRI starting in the late 1980s. Lopez Obrador ran under the banner of his own party, the National Regeneration Movement, known as Morena, which is 4 years old.
Morena — which includes many defectors from the PRI and other traditional parties— not only won the presidency, but garnered major majorities in both chambers of the national legislature.
Despite his party’s newfound dominance at the federal level, Lopez Obrador has repeatedly vowed to run a democratic administration and to reach out to all sectors.
“This government is going to represent all Mexicans,” Lopez Obrador said Monday. “No one will be on the margins of the law or above the law.”
Cecilia Sanchez of The Times’ Mexico City bureau contributed to this report.
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White House Council of Economic Advisers Chairman Kevin Hassett on the Trump administration’s efforts to renegotiate U.S. trade deals.
Days after President Trump touted trade negotiations with Mexico – White House Council of Economic Advisers Chairman Kevin Hassett said on Monday negotiators from the U.S. and Mexico are “very, very close” to a deal on the North American Free Trade Agreement.
“The team has been working overtime, late nights, going through what I would almost characterize as the final details,” he told “Mornings with Maria.”
While Hassett stayed tight-lipped on details, Trump tweeted on Friday that a deal with the U.S.’ third-largest trading partner – after China and Canada – is “coming along nicely” and any deal must take care of autoworkers and farmers.
“You should stay tuned because right now it’s closer than it’s been since I’ve been here,” Hassett, a former resident scholar at the American Enterprise Institute who was appointed as Trump’s chief economist in early 2017, added.
MEXICO CITY (Reuters) – Mexico’s economy minister Ildefonso Guajardo said on Monday the country has put forward a proposal to update the North American Free Trade Agreement’s contentious rules of origin, and in turn was studying the U.S. position.
The United States has demanded tougher rules of origin, particularly on what percentage of a car needs to be built in the NAFTA region to avoid tariffs than outlined in the current trade deal.
“We have a proposal on the table, we’re analyzing some characteristics of the U.S. position, and we’re doing it clearly in line with our dialogue with Mexico’s auto industry,” Guajardo told reporters after an event in Mexico City.
U.S. President Donald Trump, who launched the renegotiation of the 1994 pact a year ago, has said he wants the reworked deal to bring manufacturing jobs back to the United States.
Guajardo on Monday also said that Canada, which is not participating in U.S.-Mexico talks that began in Washington two weeks ago after months of negotiations between the three trade partners, could join next week, depending on progress in the next few days between Mexico and the United States.
The bilateral meetings have yielded important developments, Guajardo said, adding that he will return to Washington midweek. He did not give details.
Mexican sources briefed on the negotiations have said Mexico has offered to raise the threshold for regional content beyond a May proposal of 70 percent, up from the current level of 62.5 percent. The United States is seeking 75 percent as well as demanding a proportion of vehicles be made in factories paying $16 an hour or more.
Mexico’s El Economista financial newspaper on Monday reported that Mexico had agreed to those demands, in return for a five-year transition period. Asked about the reports, Mexico’s chief trade negotiator Kenneth Smith said that no deal on autos had yet been reached.
“We haven’t closed or resolved this chapter yet,” Smith told reporters after the same event in Mexico City, saying that Canada also needed to take part before negotiators could reach final decisions.
Smith said Mexico and the United States were discussing technical details and each other’s proposals involving the auto sector, and that Mexico was explaining the areas it considered particularly sensitive.
He also said Mexico would not budge on its rejection of U.S. bids for seasonal restrictions on fresh products or a sunset clause that could strike down NAFTA agreements after five years.
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Mexico’s incoming president has begun fleshing out his rescue plan for the country’s long-neglected oil sector.
Andrés Manuel López Obrador’s proposals include a $4bn capital injection for state oil company Pemex to boost exploration, a new refinery to slash reliance on US fuel imports and a 600,000 barrel-a-day increase in crude production in two years.
But analysts warn that his nationally focused energy policy risks putting unsustainable pressure on the world’s most indebted oil company. In particular, they point to plans for a 160bn peso ($8.6bn) refinery to be built in his home state of Tabasco over the next three years — an investment equal to the size of Pemex’s loss in the second quarter.
Mr López Obrador has not spelt out how he would fund his proposals but has named Octavio Romero Oropeza, a long-time confidante and agronomist from Tabasco, to take the helm of Pemex. “We are estimating overall investment to rescue the sector of 175bn pesos next year,” said the president-elect, who takes office on December 1.
The cash injection comes as Pemex has seen output fall from a peak of 3.4m barrels a day in 2004 to 1.866m in the second quarter this year.
Mr López Obrador said output was plunging because “the energy sector and oil industry were abandoned”, and has pledged to lift production to 2.5m b/d in two years.
He has yet to make clear whether he intends to continue with oil tenders that have seen more than 100 contracts awarded to 73 companies since 2015 under a landmark reform designed to lift Mexico’s oil output from a four-decade low. The new administration wants at least a temporary pause to oil tenders.
“Four billion dollars is a significant amount, there’s no doubt. But it is important to put it in perspective . . . One single tender round can inject more investment,” said Pablo Zárate at think-tank Pulso Energético.
Mr López Obrador has promised to achieve energy self-sufficiency by spending 49bn pesos upgrading Pemex’s six lossmaking refineries, where output has halved since May 2013, and building two new ones to halt dependence on US gasoline imports, which have increased by a third in the past two years.
But investors are alarmed at the potential for snowballing costs. The price tag for the first new refinery, to be built in Dos Bocas, has already risen from the $6bn Mr López Obrador’s team had previously indicated. “I don’t know of a single refinery that’s ever been done to budget,” said an investor at a large fund who follows Pemex closely.
Pemex, a monopoly for eight decades, has spent the past two years putting its finances in order and making huge outlays on new refineries could be a serious risk, say analysts.
“Pemex today does not have the cash or free cash flow to take on the construction of new refineries, and if the company decided to finance such an investment with debt or shift capital from exploration and production to refining, its credit metrics would weaken,” cautioned Moody’s Investors Service.
Ramping up refinery capacity could lead to Pemex halving the value of lucrative oil exports, it added.
But Mr López Obrador has said his government would keep its promise of halting gasoline imports in three years and would lower fuel prices.
Pemex has net debt of about $106bn and is expected to post earnings before interest, tax, depreciation and amortisation of approximately $25bn this year. With the state taking about 70 per cent of profits in tax, Pemex could bump up its debt to pay for refineries — but it already has hefty debt repayments due in 2019 and 2020.
Mr López Obrador’s team has indicated that it wants to halt oil tenders while it reviews contracts awarded to date and decides on whether and how fast to continue auctions.
Indeed, the government has delayed two upcoming tenders, which include joint ventures with Pemex, until next February.
Adrián Lajous, a former Pemex chief executive, has called for a moratorium on oil auctions until 2020 but said joint ventures with Pemex should resume next year.
Even if oil tenders are put on ice, analysts are urging the new administration to allow Pemex to continue forging joint ventures.
“Partnerships will be needed to grow output — international companies bring capital and technical expertise,” said Ruaraidh Montgomery at Wood Mackenzie.
Above all “Pemex should start partnering with companies that specialise in enhanced oil recovery, given the maturity of its portfolio”, to allow it to squeeze more oil from existing fields, said Pablo Medina at Welligence Energy Analytics.
One radical revamp for Pemex could be to follow the “China model”, said Juan Carlos Zepeda, head of Mexico’s oil regulator, keeping the parent company in state hands, but spinning some assets into a partially listed unit, as China National Petroleum Corp has done.
“I would like us to do the same with Pemex but that would require changing the constitution,” he said.
This article has been amended to correct the amount of oil Pemex plans to increase production by in the next two years.
PUERTO VALLARTA, Mexico (Reuters) – U.S. President Donald Trump spoke warmly of Mexico’s incoming leftist president on Monday, saying he expected to get «something worked out» on NAFTA, while a top Mexican official said there was scope to revive the trade talks this week.
«We’re talking to Mexico on NAFTA, and I think we’re going to have something worked out. The new president, terrific person,» Trump said in a speech at the White House about American manufacturing.
«We’re talking to them about doing something very dramatic, very positive for both countries, he said, without giving more details.
Talks to reshape the 1994 trade accord have been underway since last August. But they stalled in the run-up to the July 1 presidential election in Mexico, which produced a landslide victory for veteran leftist Andres Manuel Lopez Obrador.
The United States, Mexico and Canada have been at odds over U.S. demands to impose tougher content rules for the auto industry, as well as several other proposals, including one that would kill NAFTA after five years if it is not renegotiated.
Mexican Economy Minister Ildefonso Guajardo, who last week expressed hope an agreement in principle on NAFTA could be reached by the end of August, is due to hold talks with U.S. Trade Representative Robert Lighthizer at the end of the week in Washington.
He will be accompanied by Jesus Seade, the designated chief NAFTA negotiator of the incoming Mexican administration.
«There’s clearly a window of opportunity to be able to bed down a series of open issues which are not numerous, but are very complex,» Guajardo said on the sidelines of a summit of the Pacific Alliance trade bloc in the western coastal city of Puerto Vallarta.
Guajardo is due to meet his Canadian counterpart Chrystia Freeland on Wednesday, also to discuss NAFTA.
After the election, top officials from both the outgoing and new Mexican governments met in Mexico City with senior Trump administration officials led by Secretary of State Mike Pompeo.
Seade said the visit had sent out «excellent» signals.
«We hope these signals translate into a willingness to move forward,» Seade told reporters in Puerto Vallarta.
The talks have been clouded by tit-for-tat measures over trade after the Trump administration slapped tariffs on U.S. steel and aluminum imports.
The United States is also exploring the possibility of imposing tariffs on auto imports, though Guajardo said it was too early to speculate on how that would play out.
Mexico’s foreign ministry said on Monday that South Korea had initiated the process of seeking associate membership in the Pacific Alliance, which comprises Colombia, Chile, Mexico and Peru and is seeking to deepen free trade.
Singapore, Australia, New Zealand and Canada were last year admitted as associate members by the alliance. For Mexico, the expansion is part of a push to diversify its trading partners in the wake of Trump’s previous threats to pull out of NAFTA.
Guajardo indicated that despite his optimism about reaching a deal, risks still exist.
«The biggest risk is that instead of moving forward with an agenda of opening and integration, we move backwards, closing our economy and really undoing what we’ve built in the last two and a half decades,» Guajardo said.
The United States launched five separate World Trade Organization dispute actions on Monday challenging retaliatory tariffs imposed by China, the European Union, Canada, Mexico and Turkey following U.S. duties on steel and aluminum. The retaliatory tariffs on up to a combined US$28.5 billion worth of U.S. exports are illegal under WTO rules, U.S. Trade Representative Robert Lighthizer said in a statement.
“These tariffs appear to breach each WTO member’s commitments under the WTO Agreement,” he said. “The United States will take all necessary actions to protect our interests, and we urge our trading partners to work constructively with us on the problems created by massive and persistent excess capacity in the steel and aluminum sectors.”
Lighthizer’s office has maintained that the tariffs the United States has imposed on imports of steel and aluminum are acceptable under WTO rules because they were imposed on the grounds of a national security exception.
Mexico said it would defend its retaliatory measures, saying the imposition of U.S. tariffs was “unjustified.”
“The purchases the United States makes of steel and aluminum from Mexico do not represent a threat to the national security,” Mexico’s Economy Ministry said in a statement.
“On the contrary, the solid trade relationship between Mexico and the U.S. has created an integrated regional market where steel and aluminum products contribute to the competitiveness of the region in various strategic sectors, such as automotive, aerospace, electrical and electronic,” the ministry added.
Lighthizer said last month that retaliation had no legal basis because the EU and other trading partners were making false assertions that the U.S. steel and aluminum tariffs are illegal “safeguard” actions intended to protect U.S. producers.
