Mexico says will not renegotiate NAFTA under pressure, but makes new offer

MEXICO CITY/WASHINGTON: Mexico will not buckle to pressure to conclude the long-stalled renegotiation of NAFTA, President Enrique Pena Nieto’s spokesman said, but a source said the country made a new offer after the United States launched a probe exploring auto tariffs.

Differences over how to reconfigure the auto industry have slowed progress on talks to rework the 23-year-old North American Free Trade Agreement that underpins Mexico’s economy, with Mexico showing some flexibility but refusing to completely meet US demands.

On Wednesday, US President Donald Trump’s administration said it would examine whether car and truck imports from around the world harm its auto industry, a move that may lead to new tariffs on exports to the world’s secondlargest auto market.

One Trump official said the investigation was partly aimed at yielding NAFTA concessions from trade partners Mexico and Canada.

“Mexico is not going to negotiate on the basis of pressure, Mexico is very clear about what works and what doesn’t work for us,” said Pena Nieto’s spokesman, Eduardo Sanchez.

“If an agreement is reached, it will be one that truly benefits Mexico. If these conditions don’t exist, Mexico will not move forward,” he added.

Canadian Prime Minister Justin Trudeau on Thursday also said Washington was using the auto tariff probe as a negotiating tool.

However, Mexico made a new offer on autos “showing some flexibility” on Thursday, following the US announcement of the national security probe into car imports, a person familiar with the talks said. It was not immediately clear if the offer encompassed other areas under negotiation.

The three sides are in constant contact, including phone calls between ministers, and further talks were likely over the weekend, the person said.

Mexico has in recent days responded to US proposals with an offer that 20 per cent of any auto made in North America would be produced in high-wage areas, a Mexican industry source briefed on the talks said.

It was not immediately clear in what areas Mexico had shown further flexibility on Thursday.

The United States wants 40 per cent of auto content to come from areas paying at least US$16 hour.

Mexico has also proposed that 70 per cent of overall content of a vehicle made in North America come from the region, countering a US proposal of 75 per cent for high-value parts. — Reuters