Mexico calls on Trump to reuse TPP deals to reanimate Nafta

Mexico is urging Donald Trump to reuse agreements reached under the aborted Trans-Pacific Partnership to create a manufacturing powerhouse between the US, Mexico and Canada to compete with low-cost producers in China.

Ildefonso Guajardo, Mexico’s economy minister, said in an interview with the Financial Times that elements of TPP could be used to renegotiate the North American Free Trade Agreement between the three countries. His comments came as the US president agreed not to scrap Nafta, after repeated threats to tear it up.

But despite his U-turn last week saying he would bring Nafta “up to date through renegotiation”, Mr Trump backtracked again on Sunday when he told CBS news he could still terminate the pact if the renegotiations failed to provide “a fair deal for all”.

Mr Guajardo, lead trade negotiator, said using sections of TPP would offer the US president a quick and relatively easy victory on trade.

We are part of the solution that has maintained competitiveness for the US versus China

“A package is already in your pocket,” he said. “But my message is that if you become extremely greedy you may waste a victory that is already there.”

If they agreed to talks, it would be a rare point of agreement between countries whose relations have been strained since Mr Trump described Mexican immigrants as rapists during his election campaign and promised to build a wall along their border.

Mr Guajardo said that rather than seeing Mexico as a rival because of its trade surplus with the US, Washington should regard it as a partner in competition with low-cost Chinese manufacturers.

“We are fed up with complaints that Mexico is stealing jobs from US manufacturing,” he added. “We are part of the solution that has maintained competitiveness for the US versus China.”

He said instead of fighting, the nations should “team up to face the challenges” of the digital economy and robotisation.

The Mexican minister said talks could focus on agreements reached during the preparation of the TPP, including areas such as biotech, labour regulation, ecommerce and intellectual property. Access could also be offered to US companies in recently reformed Mexican sectors such as energy and telecoms.

Mr Guajardo said he had raised the suggestion of basing talks on TPP with Wilbur Ross, saying the US commerce secretary had reacted positively.

However, another person close to Mexico’s negotiating team said if the US insisted on strict rules of origin, for example, it risked playing into the hands of Chinese manufacturers, which would happily pay tariffs to secure market share.

The Mexican government is keen to reach a deal by the end of December ahead of campaigning for elections in July 2018. But that appears ambitious, particularly as Robert Lighthizer, Mr Trump’s choice of US trade representative, has yet to be confirmed.

The White House has yet to spell out its new objectives in writing or notify Congress of its intent to begin Nafta renegotiations — something it must do 90 days before talks begin.

Mr Guajardo noted that agreement on the TPP was reached in February 2016 under former President Barack Obama, only for it to be torn up 11 months later.

“The Americans won’t want to see that happen in Mexico with Nafta,” he said. “If it doesn’t happen under this [Mexican] administration, no one can assure [Mr Trump] that in December 2018 a new government will back it up.”