DANANG, Vietnam (AFP) – Mexico said “there’s life after NAFTA” on Thursday as prospects for the 23-year-old trade deal dim following US President Donald Trump’s threat to abandon the pact.
Washington wants to renegotiate the North American Free Trade Agreement (NAFTA) to cut the US trade deficit with Mexico and protect jobs it says are being soaked up over its southern border.
Four rounds of talks between the United States, Canada and Mexico to renegotiate the deal have proved inconclusive so far, dousing hopes it will survive Trump’s assault on pre-existing US trade arrangements.
Most economists say NAFTA overall has brought significant financial benefits to all three countries over its lifespan, even if some industries have suffered from jobs going overseas.
Trump, Canandian premier Justin Trudeau and Mexican President Enrique Pena Nieto are all travelling to Danang in Vietnam on Friday for the annual Asia-Pacific Economic Cooperation (APEC) summit.
Mexico’s foreign minister Luis Videgaray said NAFTA talks will continue but his country was making preparations in the event of a collapse.
“Mexico is bigger than NAFTA and there’s life after NAFTA,” he told reporters on the plane over to Vietnam, according to a transcript released by the government.
“If we don’t succeed, we have to be prepared. Trade with the United States will continue under different rules,” he added, referring to World Trade Organization (WTO) rules.
NAFTA has been in Trump’s crosshairs since his election campaign. He has accused the deal of being one-sided and replacing American jobs with cheaper labour in Mexico.
Trump has focused on the small number of sectors where American jobs have been lost to overseas competition, especially car manufacturing.
But some 14 million US jobs depend on trade with Mexico and Canada, according to the US Chamber of Commerce, making the deal popular among American industry.
Domestic political concerns among the three signatories also limit the room for renegotiation.
Mexico’s presidential election is in July, Canada holds provincial elections next summer, and US midterm elections are in November 2018.