Mexico minister: 40 percent chance of NAFTA deal before July election

Mexico minister: 40 percent chance of NAFTA deal before July election

MEXICO CITY: There is about a 40 percent chance of concluding the renegotiation of the North American Free Trade Agreement (NAFTA) before Mexico's presidential election on July 1, Mexican Economy Minister Ildefonso Guajardo said on Friday.

"After July 1 and before the U.S. (mid-term) elections (in November), I would place the probability at another 40 percent," he told Mexican television.

That meant there was about an 80 percent chance of being able to conclude the deal before the U.S. mid-terms, he said.

For a deal to be reached between Mexico, the United States and Canada on reworking the 24-year-old trade accord, U.S. negotiators would need to show flexibility, he said.

Talks, which have ground on over nine months, have been stalled over U.S. demands to impose tougher minimum content requirements for autos built in the NAFTA region.

U.S. President Donald Trump wants to change the rules to create more manufacturing jobs in the United States. He blames lower-cost Mexico for the loss of U.S. employment.

Guajardo said it was important to agree a new NAFTA deal as quickly as possible, but not at the expense of quality.

On Thursday, Mexican President Enrique Pena Nieto expressed optimism about the NAFTA talks which were complicated this week by a U.S. probe exploring auto tariffs.

Guajardo said the negotiations should not be distracted by the U.S. investigation into whether car and truck imports from around the world are harming its auto industry.

Mexico has proposed that 70 percent of overall content of a vehicle made in North America come from the region, countering a U.S. proposal of 75 percent for high-value parts.

The United States also wants 40 percent of auto content to be sourced from areas paying at least US$16 hour. Mexico has responded by proposing that 20 percent of any auto made in the region be from high-wage areas, a source said.

Guajardo also denied there was a rift between him and Foreign Minister Luis Videgaray over the NAFTA talks. He was responding to media reports that Videgaray was pushing for a quick deal and that he was holding out for a better one.

(Reporting by Dave Graham; Editing by Nick Zieminski and Susan Thomas)

Source: Reuters