Mexico’s economy minister to meet US auto executives in trade push

Ildefonso Guajardo, Mexico’s economy minister, will meet executives from Ford and General Motors in Detroit on Friday, as well as officials from two auto-parts companies with plants in Detroit and Mexico, as part of a visit designed to talk up the benefits of Nafta.

Mr Guajardo, who was part of the team that negotiated the North American Free Trade Agreement that took effect in 1994, will also address the Detroit Economic Club on the subject of US-Mexican bilateral relations, relations between the state of Michigan and Mexico and the current situation and future of the free-trade pact, the ministry said in a statement, writes Jude Webber in Mexico City.

It did not say whom the minister would meet or name the car-parts companies.

President Donald Trump has vowed to revamp Nafta, saying the current deal is not in the US’ interests. According to Inside US Trade, a trade publication, Commerce secretary Wilbur Ross this week told Democrats on the House Ways and Means Committee that the administration would formally notify Congress that it intended to renegotiate Nafta “some time around March 15”.

That will trigger a 90-day review period. However, that is supposed to be preceded a month earlier by a full and detailed summary of the objectives of the renegotiation – something that has not happened yet.

Mexico is not expecting talks to begin before June because of the legal time-frames, a ministry spokesman said.

Mr Ross has suggested talks could focus on rules of origin and dispute resolution mechanisms. Mr Trump has vowed to pull the US out of Nafta unless he can get a better deal.

Mexico wants to drive home the message that Nafta has been beneficial to both sides. Nearly 5m US jobs rely on Nafta, and for every $1 in Mexican goods exported, 40 cents is US content.

Mexico is Michigan’s second-biggest export market, worth $12bn last year. Michigan car parts companies sold $4.2bn worth of parts to Mexico last year, a 140 per cent increase on 2009, according to the Mexican ministry.

Mexico wants to keep Nafta and is willing to negotiate improvements. Nevertheless, it is also preparing itself for the end of a trade pact that has helped it become a major manufacturing power.

“Mexico is getting prepared to learn to live without Nafta,” one senior Mexican official said in a meeting with investors, noting that China was the US’ third-biggest trading partner and yet had no free-trade pact.

But Mexico has two red lines in Nafta negotiations: “We will not negotiate tariffs. The tariff box is closed,” the official said. He added: “We will not negotiate on managed trade. Anything that smells like managed trade is not acceptable to us.”