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Sept. 28 — Mexico hasn't given up hope that the Trans-Pacific Partnership (TPP) could be ratified by the U.S., despite the misgivings expressed by both leading presidential candidates, according to Mexico's top trade official.
Comments by candidate Hillary Clinton (D) that she doesn't currently support the TPP are being interpreted to mean that she will look for some modifications to the agreement, Mexican Economy Secretary Ildefonso Guajardo said in an exclusive interview with Bloomberg BNA.
“If I read correctly, what Hillary Clinton is saying is that she has standards for trade agreements and she has voted for trade agreements that meet her standards, and she has voted against trade agreements that are not meeting her standards,” Guajardo said, referring to Clinton's remarks during the first presidential debate Sept. 26. “So the question is, how a Hillary Clinton presidency influences the agenda in TPP.”
The TPP, a 12-country agreement including both the U.S. and Mexico, has been signed by all members and is awaiting ratification in each country. Under the terms of the agreement, countries representing at least 85 percent of the proposed trade region's gross domestic product must sign it for it to become effective. It is currently under consideration by the Mexican Senate, and Guajardo has predicted a vote before the end of 2016 (83 ITD, 4/29/16).
Several Mexican officials have said TPP shouldn't be re-opened for negotiation, even if the U.S. doesn't ratify it, but Guajardo suggested that there are other options for making modifications that a Clinton presidency might require for its support.
“Probably it will not be through opening the TPP, but there are always very creative ways to do actions that do not open the negotiations,” Guajardo said. “So we have to wait and see how the next president of the United States is going to go finally about this trade agreement.”
Guajardo has also suggested that another Latin American trade agreement, the Pacific Alliance could be expanded to include Asia if the TPP is blocked by the U.S. The Pacific Alliance includes Mexico, Peru, Chile and Colombia (185 ITD, 9/23/16).
“If the TPP gets roadblocks ahead of us, we should think big—how to expand the Pacific Alliance in order to become inclusive with the Asian Pacific countries,” Guajardo told Bloomberg BNA. “Most of the countries in the Pacific Alliance have very strong trade agreements—Chile, Peru—with Asian countries. So why don't we take that instead and really take the stage?”
The Pacific Alliance could also help encourage inter-Latin American trade, Guajardo said, by aligning with a South American trade agreement, Mercosur. Mercosur includes Brazil, Argentina, Paraguay, Venezuela and Uruguay.
“Our economies are already linked; our best customer in Mexico is Brazil,” Guajardo said. “It makes a lot of sense for the Pacific Alliance to do the good disciplines of trade in order to make it easier to do business with Mercosur countries.”
And because the U.S. is the major parts supplier for one of Mexico's top exports, automobiles, the North American Free Trade Agreement ensures that the U.S. also would benefit from these agreements with the Pacific Alliance, Guajardo noted.
“Many of the cars we are selling in the Pacific Alliance are made with U.S. parts,” Guajardo said, noting that each dollar of goods Mexico exports includes 40 cents of U.S. inputs. “Since those countries already have a free trade agreement with the U.S., the parts that are in Mexican exports with U.S. content are favored in these deals.”
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