AMLO Secretary of the Economy sees "NAFTA" light "for October

The new Minister of the Economy of Mexico says that it is possible to reach an agreement on NAFTA by October, and believes that a "NAFTA agreement" "would be preferable to the absence of agreement.

Ismael Ángeles

Graciela Márquez, a Harvard-trained economic historian nominated by President-elect Andrés Manuel López Obrador for Mexico's most important commercial position, believes that US President Donald Trump could sell a market to his supporters in a sign that the new Mexican leader has yielded to his demands.

"I think he's now ready to sign NAFTA because the only thing he's got is Korean bargaining," Márquez told the Financial Times in his Colegio office de México, in reference to a revised free trade pact with Korea. from South.

Lopez Obrador won an overwhelming election victory a week ago and will take office on December 1 as the most powerful Mexican president in a generation, with a majority in both houses of Congress.

Although the left-wing nationalist claims that Mexico must strengthen its domestic market and not rely solely on foreign trade, it supports the North American Free Trade Agreement (NAFTA). Márquez and Jesús Seade, chief negotiator of the new government and former director of the World Trade Organization, will now join the negotiations led by the government before Lopez Obrador took office.

Márquez was optimistic despite the stalemate surrounding the contentious issues of NAFTA, such as the rules of the auto sector, the settlement of disputes and the desire of the United States to submit the law. 39, agree to periodic renegotiation.

He also warned against the "self-fulfilling prophecy" that the prospect of tariffs in the highly integrated automotive sector would be the death of NAFTA.

"I see the possibility of signing an agreement, perhaps at the end of September or the beginning of October," he said. But she acknowledged that it would probably be a "NAFTA-lightened". Such a modest agreement would ensure the changes already agreed, but that would not change much of the original agreement.

Márquez said that "it is very difficult to stop the integration between these two economies.The best thing for the three partners of NAFTA is to sanction this integration. But it's a very optimistic point of view. "

One of the things that aims to change is Trump's view of the US trade deficit with Mexico.

She suggests applying a value-added method for commercial accounting. For example, a TV assembled in Mexico with 80% of Asian components would represent only 20% of Mexico and not 100%. "In fact, the United States has a large surplus with Mexico," he said.

Mexico and Canada are not the American problem, he added. "If NAFTA were to run out, the US deficit with China would increase.The problem is China."

Meanwhile, Mexico hopes to learn from China and get Chinese investment, since the new government plans to increase investment in infrastructure projects.

Márquez also wants to promote the transfer of technology and domestic talent, trying to convince foreign investors to finance engineering, mathematics and science teachers in Mexican public universities who would also work in their companies.

Márquez, whose Harvard thesis deals with the political economy of Mexican protectionism in the late nineteenth and early twentieth century, questions the idea that López Obrador had a state vision of the economy and trade. In 1980, Mexico had more than 2,000 state-owned companies, but today there are only a few. "We do not go back to the past," he said.

The increase in domestic production would strengthen the Mexican economy and also open up new market niches, he added, such as bulk artisanal export to China or the sale of coconut water to Generation Y.