Mexico will not be left out in the dark if the US decides to call it quits on the North American Free Trade Agreement (NAFTA). Mexico has been working to put its eggs in baskets other than the one belonging to the United States. The country could reach a framework for a trade deal with the European Union in the next two weeks provided both sides can reach accord on things like agriculture exports, investment dispute settlement and rules of origin.
NAFTA talks have been tied up largely over US demands to up the input of American raw materials in cars. Mexico and the EU already have an agreement that has cut tariffs on goods like cars and machinery since 2000, and both sides agreed in 2015 to deepen their trade relationship. If this deal goes forward, it would free up trade in sectors like e-commerce and agriculture. But mostly it would lessen Mexico’s dependence on the US.
Apart from cozying up to the EU, Mexico and Canada have vowed to keep NAFTA going even if the US bows out. Mexico has also been in discussions with China about a trade deal. The EU has also been expanding its trade relations and is in talks for a deal with Japan and Canada.
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