Mexico seeks stronger trade in Europe prior to NAFTA negotiations

Mexico has started talks with European countries to update trade agreements ahead of the Mexican government’s anticipated renegotiation of the North American Free Trade Agreement with the United States.

Lars Lokke Rasmussen (L), the prime minister of Denmark, met with Mexican President Enrique Peña Nieto on Monday in Mexico City, where the leaders said they want to increase trade between the countries. Mexico has begun efforts to renegotiate or update trade agreements with several European countries ahead of its anticipated renegotiation of the North American Free Trade Agreement with the United States. Photo courtesy of Presidency of Mexico
Lars Lokke Rasmussen (L), the prime minister of Denmark, met with Mexican President Enrique Peña Nieto on Monday in Mexico City, where the leaders said they want to increase trade between the countries. Mexico has begun efforts to renegotiate or update trade agreements with several European countries ahead of its anticipated renegotiation of the North American Free Trade Agreement with the United States. Photo courtesy of Presidency of Mexico

Mexico and European Union members have previously expressed desire to set up new agreements, but trade talks “accelerated” after U.S. President Donald Trump took office, Mexican officials said.

Mexican President Enrique Peña Nieto on Monday met with Lars Lokke Rasmussen, the prime minister of Denmark, in Mexico, where the leaders signed a joint declaration seeking to strengthen political dialogue, to boost bilateral cooperation and to increase trade and investment, El Universal reported.

“We have reaffirmed our friendship between the two countries, we have reaffirmed our vocation to promote the free trade by tightening the trade between the two nations,” Peña Nieto said in a speech in Mexico City.

Peña Nieto also said Mexico is renegotiating the Free Trade Agreement, part of the Political Coordination and Cooperation Agreement, with the EU that entered into force in 2000.
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In a speech, Rasmussen said that he agreed with Peña Nieto’s call to improve trade between the countries but “not in terms of barriers.” Rasmussen said he supports updating the Free Trade Agreement between Mexico and the EU, adding he wants to see Mexico and Denmark increase trade.

“I confirm that we want to have more trade with Mexico, I would like to see more investments in Mexico and I invite Mexican companies to invest more in Denmark,” Rasmussen said.

CNN Money reported Mexican officials will travel to Argentina later this week for the World Economic Forum’s Latin America summit where they are expected to express interest in buying more goods, particularly corn and soy, from Brazil and Argentina in a shift away from the United States.

Mexico also looks to become one of the first countries to set up a trade agreement with Britain after it leaves the EU, Mexican Foreign Ministry official Juan Carlos Baker said, adding that negotiating trade with the EU is a “priority.”

“We have made it clear that now, in a year, in two years, when the United Kingdom is ready, Mexico wants to have a preferential business relationship … Regardless of the EU, the United Kingdom has always been important for Mexico,” Baker said. “Negotiation with the EU is a priority for Mexico and we are convinced that it is achievable to finish it this year.”

Trump vowed to “renegotiate NAFTA or withdraw from the deal under Article 2205” within his first 100 days in office. Trump has repeatedly said NAFTA is a “bad deal” that has harmed Americans while benefiting Mexico and Canada. Mexican Foreign Minister Luis Videgaray recently said he expects NAFTA negotiations to begin in the summer.

In 2015, the U.S. Congressional Research Service said NAFTA’s effects were neither damaging nor helpful.

“In reality, NAFTA did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters,” the independent report said. “The net overall effect of NAFTA on the U.S. economy appears to have been relatively modest, primarily because trade with Canada and Mexico accounts for a small percentage of U.S. GDP.”

By Andrew V. Pestano