Nafta negotiation may start in May: Mexico

[MEXICO CITY] Mexico's government expects negotiations to modify the North American Free Trade Agreement (Nafta) with Canada and the United States, one of US President Donald Trump's key demands, to begin in May.

President Enrique Pena Nieto said his government launched on Wednesday a 90-day period of consultations with the private sector to prepare for the Nafta talks.

Pena Nieto indicated that the US government would start a similar process ahead of the negotiations, which he said would take place with "broad respect."

A government statement said the consultations seek to "set the parameters that will guide the revision and deepening" of Nafta.

"The consultation process is indispensible to achieve a modernisation of Nafta that meets national interests," it said.

Mr Pena Nieto did not say when the negotiations will begin but Economy Minister Ildefonso Guajardo, who was in Washington last week for talks with US officials, said they "would start in early May."

US-Mexican relations are in the midst of their biggest diplomatic crisis in decades following Mr Trump's insistence last week that Mexico will pay for a massive wall along the border to stop illegal immigration.

The row prompted Mr Pena Nieto, who vowed that Mexico will never pay for the barrier, to cancel a meeting with Mr Trump in Washington.

Mr Trump has also pledged to renegotiate the 23-year-old pact, calling it a bad deal that has left the United States with a US$60 billion trade deficit with Mexico.

The US leader, who has vowed to put "America first," says he will pull out of Nafta if he does not get a good deal, a threat that the Mexican government has matched.

Bilateral trade amounts to half a trillion dollars per year, with 80 per cent of Mexican exports going to the United States.

While Mexico faces tough negotiations with its North American partners, the government and the European Union announced on Wednesday that they would accelerate their own free trade talks.

"Together, we are witnessing the worrying rise of protectionism around the world," the EU's top trade negotiator, Commissioner Cecilia Malmstroem, and Guajardo said in a joint statement.

"Side-by-side, as like-minded partners, we must now stand up for the idea of global, open cooperation," they said.

Mexico and the EU have had a trade deal since 2000 but agreed in 2015 to modernise the accord to better reflect today's global economy.

The US-Mexican spat has sparked patriotic fervour in Mexico, with people launching a social media campaign urging Mexicans to boycott US products such as Starbucks coffee, McDonald's food and Coca-Cola.

Mr Pena Nieto, whose popularity plunged to 12 per cent last month amid relentless drug violence and rising gasoline prices, has praised this display of "national unity." "The country is experiencing a historic moment in which national unity is blooming as the great strength of Mexico," he said.

He announced the Nafta consultations during an event on Wednesday to relaunch the promotion of the "Made in Mexico" seal on Mexican-made products.

"We must buy Mexican not only because we are (Mexican), but also because they are quality products," Mr Pena Nieto said.

AFP