Under pressure from President Donald Trump, Mexico is preparing to go over modifications to trade rules about a product’s country of origin to attempt to prevent a disruptive battle with the United States over commerce.
As the two countries start a challenging new relationship, Mexico sees possible common ground with Trump on the “rules of origin” of the North American Free Trade Agreement (NAFTA) that binds the two nations and Canada, numerous sources said.
Rules of origin are policies setting out where trade items are sourced from. Although official settlements about NAFTA have not begun, the rules might become favor U.S. market over rivals from outside North America, especially in Asia.
Modifications to those rules could assist align Mexico with Trump’s commercial plan of increasing U.S. manufacturing jobs and dovetail with the Mexican government’s calls to enhance North American competitiveness.
It might also help lead the way for a more comprehensive deal with Trump regarding border security and immigration, Mexican officials think.
Discussion about NAFTA rules of origin will be a “very important” point of conversation between the two nations now that Trump remains in office a Mexican official stated.
A White House official stated: “As a general rule, it is in the best interests of the U.S. to insist on strong rules of origin provisions in pursuing bilateral negotiations. Lax rules of origin in proposed treaties like the now defunct Trans-Pacific Partnership shrink and weaken our supply chain and contribute to the offshoring of American jobs.”
Mexican Foreign Minister Luis Videgaray and Economy Minister Ildefonso Guajardo is going to hold talks with top Trump officials in Washington on Wednesday and Thursday, where security, immigration and trade will be talked about.
Fears of economic disaster have haunted Mexico since Trump won the elections in November, vowing to tear up NAFTA, impose tariffs and construct a wall on the United States’ southern border to stop illegal immigration.
While Mexico hesitates to change the 1994 trade accord, authorities concede that some changes might be required to help keep trade open with the United States, which takes in 80 percent of its exports.
“What we want is to maintain free access for Mexican products, without restrictions, without tariffs and quotas,” Videgaray, the spearhead of the federal government’s outreach to Trump, stated on Monday.
