Any attempt to introduce quotas or tariffs to the North American Free Trade Agreement would be disastrous for the three-nation treaty, Mexican Economy Minister Ildefonso Guajardo on Tuesday told a Toronto conference on the future of North America.
U.S. President Donald Trump — who says free trade treaties have cost countless thousands of American jobs — wants NAFTA to be renegotiated with a focus on cutting his country’s large trade deficit with Mexico.
One idea floating in Washington is that of a border tariff, which could hit Mexican exports.
“Nothing in the new NAFTA should be a step backward. We will definitely not include any type of trade management measures, like quotas, or open the Pandora’s box of tariffs,” Guajardo said.
“That will be disastrous in any process moving forward,” he said.
New tariffs would result in special interests in all three nations asking for protection, Guajardo predicted.
Trump has revealed little about his intentions for NAFTA, which came into force in 1994, except that he wants to tweak the U.S. trading relationship with Canada while pushing for larger changes with Mexico.
Canadian officials have suggested the United States would first negotiate with Canada and then focus on Mexico, an approach that trade experts say is almost unworkable and one that Mexico dislikes.
Guajardo said the bulk of the NAFTA talks would have to be carried out on a trilateral basis to give investors confidence that the same set of investment rules applied to all three nations. For the talks to succeed, governments in all three nations would have to prove they had benefited, he added.
“If I don’t go back home with a trade agreement that can be clearly understood as a beneficial outcome for Mexico, there is no way the Mexican Senate will approve it,” he said.
The Mexican government expects the talks to start this summer, said Guajardo, who stressed several times how well Canada and Mexico had worked together in the past on trade.
Guajardo and Mexican Foreign Minister Luis Videgaray were to hold talks with Canadian Foreign Minister Chrystia Freeland later on Tuesday.
Freeland said earlier this month that Canada opposed the idea of the United States imposing new border tariffs and would respond to any such move.
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