Mexico Is Not Afraid To Pull Back From the NAFTA Deal
By Daisy Joseph
During the election campaigns, Donald Trump had been vocal against the NAFTA deal, which he claimed was unfair to the Americans. The NAFTA deal is between three countries – USA, Mexico and Canada. The Mexican Peso faced a tough time in the forex market, when Donald Trump became the President. The POTUS wants to renegotiate the NAFTA deal, but it was not officially moved to the Congress.
Luis Videgaray, the foreign minister of Mexico said that Mexico wouldn’t be afraid to pull back from the deal, if the new deal doesn’t benefit the Mexicans. He assured that pulling out of the deal is not what Mexico wants, but if that is the last available resort, Mexico won’t be afraid to take it.
Videgaray hoped that the negotiation will be a constructive process. Trump had been calling NAFTA, a one-sided deal which benefits only the Mexicans. Wilbur Ross, the Commerce Secretary of the USA could notify the Congress about the renegotiation plans of the Trump administration. Once the notice is submitted, it will begin the 90-day consultation period, during which the Congress will give its views. Trade talks can commence at the end of the consultation period. Ross commented that the trade talks would take at least a year.
Both USA and Mexico are not specific about what they want from the deal. The rules of origin dictate that 62% of the raw materials must be sourced from any one of the three countries. This may be changed but there is no clear information on the new deal yet.
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