Companies no longer fear the North American Trade Agreement (NAFTA) will collapse and top US multinationals in Mexico are committed to investing in the country, the head of a global business lobby said on Wednesday.
Mexico’s Executive Council of Global Companies (CEEG) president Frederic Garcia said that preparations to renegotiate NAFTA and growing awareness of the accord’s economic benefits had all but put an end to fears that the deal would be scrapped.
“There was a moment where the probability, or the perception that NAFTA would end, was very strong,” Garcia said in an interview in Mexico City. “But today I think there’s an awareness that it will continue. The big worry that the deal could come to an end is an issue that’s behind us.”
The council represents a host of multinationals in Mexico, including AT&T Inc, Coca-Cola Co, General Motors Co, Microsoft Corp, Exxon Mobil Corp, Nestle SA, HSBC Holdings PLC, Siemens AG and IBM Corp, which it says account for about 40 percent of total foreign direct investment.
It and other business associations have been active in extolling the benefits of NAFTA to Americans to counter threats by US President Donald Trump to dump the 23 year-old accord that binds the US, Mexico and Canada.
Mexican Economy Minister Ildefonso Guajardo on Tuesday said that he expected the US government to notify the US Congress early next week of plans to rework the accord, yielding talks by late August.
It was not yet clear how NAFTA would be revamped, but if Mexico’s efforts to update its free-trade deal with the EU proved instructive, it could include provisions to boost corporate compliance and adherence to the law, Garcia said.
Trump said last month he was ready to renegotiate NAFTA with Mexico and Canada, though since taking the presidency in January he also has maintained that the US could withdraw from the agreement if talks did not work in favor of his homeland.
Earlier that month Ford Motor Corp abruptly canceled a US$1.6 billion plant in central Mexico following verbal attacks by Trump.
However, as the rhetoric from the White House began to moderate, the peso has recovered somewhat, and fears for NAFTA’s future have eased.
Last week, a Mexican business lobby said it expected investment to drop slightly this year due to uncertainty over Trump, but Garcia said the council would make no forecasts over projected outlays to avoid drawing attention to the matter.
“As far as the US firms in the CEEG go, from the first day of the new US administration they’ve stated their great interest to continue operating in Mexico [and] their great interest to continue investing in Mexico,” he said.
However, they had done so in such a way as to preserve their interests with the US administration, Garcia added.
Canadian Minister of Foreign Affairs Chrystia Freeland on Wednesday said that she would travel to Mexico next week to discuss renegotiating the NAFTA.
Freeland also told parliament that Canada wanted all three member nations to be at the table for the formal talks, which she indicated should start later this year.
Freeland said she was in very close contact with Guajardo and Mexican Foreign Minister Luis Videgaray, who are leading the NAFTA file.
“Next week I am traveling to Mexico to meet with my counterparts there,” she said.
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