Nafta talks resume as executives prepare for worst

4 Sep 2017   North America

Mexican and US business leaders have begun studying legal options in case President Donald Trump follows through on renewed threats to scrap what he terms the “horrible, terrible” North American Free Trade Agreement, as negotiations on updating the pact resume on Friday. “We’re analysing strategies . . . different scenarios,” Gustavo de Hoyos, head of the Coparmex business confederation, told the Financial Times after business leaders accompanying the negotiations ran through some of “the legal consequences of what would happen on D-plus-one”.  US business groups have been engaged in a similar exercise to identify “legislation and litigation” to halt any move by Mr Trump to pull the plug on the 23-year-old accord, according to one person close to the talks. Robert Lighthizer, the US Trade Representative, met US business leaders this week after fresh presidential tweets and threats fanned renewed withdrawal fears, according to two sources.

Mexico believes the US would have to take the lead on any legislative action and does not rule out legal action in US courts, though that was not yet being discussed, said Mr de Hoyos, who saw “moderate optimism” going into round two of Nafta negotiations with the US and Canada, from September 1-5 in Mexico City.  “All this is unprecedented. We’re in uncharted waters,” said one former official.  Luis Videgaray, Mexico’s foreign minister, said in Washington after meeting US officials on Wednesday that his country would abandon the talks if the US moved to terminate Nafta unilaterally. Ildefonso Guajardo, trade minister, appears to have increasing reservations about reaching a deal: he told local newspaper El Economista this week that the threat of a US pullout was “real and high”.

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