WASHINGTON – After “somewhat of a difficult” January for U.S.-Mexican relations, things have improved “a little” in the past few months, Mexico’s ambassador to the U.S. Gerónimo Gutiérrez said Wednesday.
After his inauguration, President Trump quickly signed an executive order green-lighting construction of his controversial southern border wall, vowing that Mexico would shoulder the estimated $20 billion cost. Mexican President Enrique Peña Nieto promptly canceled a meeting scheduled in Washington with Trump.
A month later, Gutiérrez made headlines during a Mexican Senate confirmation hearing when he discussed the fragility of the U.S.-Mexico relationship.
“I said that the U.S.-Mexico relationship is at a critical point, and that there was a chance that the relationship could be derailed, but nevertheless that the possibility of constructing a much more mature relationship was also at hand,” Gutiérrez recalled.
Throughout his appearance at Georgetown University, Gutiérrez repeatedly touched on Trump’s proposal to renegotiate or possibly eliminate the North American Free Trade Agreement, a 23-year-old treaty between the U.S., Mexico and Canada. Trump has called NAFTA the worst trade deal in history because of its impacts on American workers and industry.
Gutiérrez said Mexico agrees that NAFTA can be updated, but it would be a mistake to eliminate the treaty entirely; he believes it has ultimately benefited all three countries, though some firms and industries have suffered. He said those aspects are unavoidable in free trade, but NAFTA has created a good balance in North America.
“Mexico does not want to sit in a negotiation having the finger pointed at us, saying you took advantage of the United States,” said Gutiérrez, who previously served as president of the North American Development Bank, which was established under NAFTA. “That’s not the case.”
Mexico also objects to any attempts to establish tariff or non-tariff restrictions beyond what NAFTA already allows, and believes it’s important to avoid any impacts of the free decisions of firms.
“The past few months have allowed both governments to interact more with each other, to have cabinet members exchange views on different matters,” Gutiérrez said. “And though we’re very far from where Mexico believes we should be, the prospects of having a good deal in the future have improved. … I am confident that our relationship will continue to evolve positively.”
Gutiérrez cited what he perceives as specific benefits from NAFTA. A number of Midwestern states export corn, soybeans, pork and other products to Mexico as their No. 1 market. Those states will have a difficult time if NAFTA is discarded, Gutiérrez said.
He noted that the auto industry in North America is a good example of joint production, as opposed to the three individual countries trading among themselves. The auto industry is better off working regionally, Gutiérrez said, noting Germany’s collaboration with European partners and Japan’s with Asian partners.
“If you disrupt the supply chains of the auto industry, what you’re going to in fact be doing is harming the ability of North American auto industries to compete worldwide,” Gutiérrez said.
The timing of any potential NAFTA renegotiation will be critical, Gutiérrez said, and he hopes that the three sides will come together sooner rather than later, given U.S. midterm elections and Mexico’s presidential election in 2018.
“In my view, it’s not wise to go into an election year having a trade negotiation open under any circumstance and for any country,” he said. “That’s very risky.”
Gutiérrez listed a few areas of improvement for NAFTA: incorporating new sectors and disciplines into the treaty, such as e-commerce and telecommunications; finding better ways for all three partners to work together in becoming more competitive as a region; and improving enforcement of free and fair trade.
“I think the vast majority of Mexicans just want a good and useful relationship with the United States, and in my view, and I hope I’m not wrong… the vast majority of Americans want precisely the same thing,” he said.