By Dan Calabrese ——Bio and Archives--August 22, 2018
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We’re already hearing that a trade deal with China seems imminent, and now Mexico is chiming in to let everyone know they too expect to work something out as part of the long-anticipated renegotiation of NAFTA.
How soon? Is this afternoon soon enough for you?“We hope that we’ll have a solution in the next couple of hours, or the next couple of days,” Mexican Economy Minister Ildefonso Guajardo told reporters before entering the offices of U.S. Trade Representative Robert Lighthizer for NAFTA talks. The Mexican peso rose against the dollar after his comments. A spokesperson for Lighthizer’s office said there was no deal yet and that “major issues” were still outstanding on NAFTA. Since restarting last month, the talks have focused on settling differences between Mexico and the United States that go to the heart of U.S. President Donald Trump’s complaint that NAFTA has hollowed out U.S. manufacturing to Mexico’s benefit. Trump has threatened to dump the 24-year-old accord if it is not reworked to the advantage of the United States. He hopes to reduce the U.S. trade deficit with lower-cost Mexico and claw back jobs, particularly in the automotive industry.I’m already on record as saying trade is not the urgent economic imperative Trump thinks it is, so I don’t expect this to have the economic impact the president anticipates. But continued tariffs could do a lot of damage, so if we get these disputes settled, it eliminates a barrier to continued strong growth. An obstacle we erected ourselves, but whatever. That said, I’m not sure why Mexico thinks “major issues” can be resolved in a few hours, but what seems very clear is that Mexico is highly motivated to put this issue behind them. Trump’s negotiating methods seem to be effective, even if the imperative behind them were less than economically literate.
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