Mexico says NAFTA deal un­likely this week

Mexico’s peso sank to its weak­est level and bench­mark stock in­dex fell about 1% to its low­est since early April

The Gulf Today - Business - - INTERNATIONAL -

MEXICO CITY: Mexico’s econ­omy min­is­ter said that he saw di­min­ish­ing chances for a new North Amer­i­can Free Trade Agree­ment ahead of a Thurs­day dead­line to present a deal that could be signed by the cur­rent US Congress.

US House Speaker Paul Ryan has said that the Repub­li­can­con­trolled Congress would need to be no­ti­fied of a new NAFTA deal by Thurs­day to give law­mak­ers a chance of ap­prov­ing it be­fore a newly elected Congress takes over in Jan­u­ary.

“It is not easy. We do not think we will have it by Thurs­day,” Mex­i­can Econ­omy Min­is­ter Ilde­fonso Gua­jardo told broad­caster Tele­visa on Tues­day.

But Cana­dian Prime Min­is­ter Justin Trudeau struck a more up­beat tone, telling re­porters in Cal­gary a few hours later, “There is very much an em­i­nently achiev­able out­come... and we are very close.”

“We are go­ing to con­tinue to re­main op­ti­mistic,” said Trudeau. He met with US Pres­i­dent Don­ald Trump on Mon­day and dis­cussed the pos­si­bil­ity of bring­ing NAFTA talks to a “prompt con­clu­sion.”

Ne­go­tia­tors from the United States, Mexico and Canada have been in in­tense talks since last month to try to reach a deal be­fore US con­gres­sional elec­tions in Novem­ber. Mexico’s pres­i­den­tial vote on July 1 also com­pli­cates the process.

“We will keep ne­go­ti­at­ing, and in the mo­ment that we have a good ne­go­ti­a­tion, we can close the deal... in­de­pen­dent of which Congress the cur­rent or new that will vote on it,” said Gua­jardo.

Mexico’s peso sank to its weak­est level in over a year on Tues­day, and the coun­try’s bench­mark stock in­dex fell about 1 per cent to its low­est since early April.

Gua­jardo said the talks could be con­cluded be­fore or just af­ter the July 1 vote.

Left­ist An­dres Manuel Lopez Obrador is lead­ing polls to win the pres­i­den­tial race, and his pick for econ­omy min­is­ter, Gra­ciela Mar­quez, said last month his ad­min­is­tra­tion would be will­ing to ac­cept a deal struck be­fore the elec­tion.

If that is not pos­si­ble, she said it would be bet­ter to com­plete the ne­go­ti­a­tion af­ter the next government takes of­fice at the start of De­cem­ber. Gua­jardo said the next government’s team would need to be in­volved in any talks af­ter July 1.

Gua­jardo said ne­go­tia­tors were getting close to reach­ing a deal on rules for the auto sec­tor un­der NAFTA.

How­ever, talks still faced the hur­dles of US de­mands for a sun­set clause that would al­low NAFTA to ex­pire if it is not rene­go­ti­ated ev­ery five years, and the elim­i­na­tion of set­tle­ment panels for trade dis­putes.

More flex­i­bil­ity was needed for a deal, Gua­jardo said.

Ken­neth Smith, the chief Mex­i­can ne­go­tia­tor at the talks, said that for Mexico there were no dead­lines.

Ir­re­spec­tive of the Thurs­day dead­line men­tioned by Ryan, there was still time to rat­ify a new NAFTA this year, Smith told broad­caster En­foque Noti­cias.

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