Mexican Front-Runner Believes in NAFTA 2.0
The Mexican presidential front-runner is prepared to pick up NAFTA negotiations where the current government leaves off, according to Graciela Marquez Colin, a top economic advisor to Andres Manuel Lopez Obrador. Colin, who was speaking April 17 to a Washington…
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audience, said Lopez Obrador appreciates the U.S. trade representative's goal of raising wages in the Mexican auto sector. "We support the idea of wage increases in NAFTA in autos because there would be spillover to other high skill industries," she said. But she cautioned, "Regional content changes should preserve the region's competitiveness." The Lopez Obrador administration does want to return to the growth rates of the '50s and '60s, but not to the tariff walls in place in Mexico at that time, she said. "It's not a return to protectionism." Colin said investor protections in NAFTA have worked well, and eliminating them would be NAFTA 0.5 rather than NAFTA 2.0. And, she said, a five-year sunset clause would be like renegotiating NAFTA all the time. If Lopez Obrador wins on July 1, Colin said, she and her colleagues are prepared to implement an agreement, if one exists, or to continue working. But, she said, Mexico would want a deadline to reach an agreement. "You have to be clear you're not negotiating NAFTA all the time." President Donald Trump recently said as far as he's concerned, NAFTA negotiations can go on forever, because the uncertainty is dissuading American companies from opening Mexican plants.