Mexico will leave the NAFTA negotiating table if U.S. President
Donald Trump decides to trigger a 6-month process to withdraw from the trade
pact, three Mexican sources with knowledge of the talks told Reuters on
Wednesday.
Reuters reported earlier in the day that Canada was increasingly
convinced that Trump would soon announce the United States intends to pull out
of the North American Free Trade Agreement (NAFTA), sending the Canadian and
Mexican currencies lower and hurting stocks across the continent.
“I think it’s indisputable that if Trump announces a U.S.
withdrawal from NAFTA, well at that moment the negotiations stop,” said Raul
Urteaga, head of international trade for Mexico’s agriculture ministry.
The two other sources, who are involved in the trade talks and
asked not to be named, said that Mexico remains firm on its position to get up
and leave from the negotiating table if Trump goes through with the move.
While a NAFTA termination letter would start the six-month exit
clock ticking, the United States would not be legally bound to quit NAFTA once
it expires. Washington could use the move as the ultimate sleight of hand as it
seeks to gain leverage over Canada and Mexico in talks to update the
24-year-old trade pact.
Trump has long called the 1994 treaty a bad deal that hurts
American workers. His negotiating team has set proposals that have alarmed
their Canadian and Mexican counterparts.
Among the most divisive are plans to establish rules of origin
for NAFTA goods that would set minimum levels of U.S. content for autos, a
sunset clause that would terminate the trade deal if it is not renegotiated
every five years, and ending the so-called Chapter 19 dispute mechanism.
Though observers in Canada and Mexico have become increasingly
gloomy about the upcoming Jan. 23-28 Montreal round in recent weeks, some took
heart from a recent speech made by Trump to farmers this week in which he held
back from provocative comments about the trade deal.
Urteaga, who was a member of Mexico’s original NAFTA negotiating
team in the 1990s, said that Trump’s speech was an “interesting signal.”
“No news, means good news sometimes.”