U.S. And Mexican Leaders Set For Talks Over NAFTA's Future

Jan 25, 2017
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RACHEL MARTIN, HOST:

Top officials from Mexico are in Washington, D.C., today to meet with the Trump administration. They're going to be talking about the future of the North American Free Trade Agreement, NAFTA. President Trump says it will be renegotiated. But he hasn't given any specifics about what that would look like. As NPR's Carrie Kahn reports, that has left Mexico struggling how to respond to Trump's threats to rip up the trade deal.

CARRIE KAHN, BYLINE: What's a country dwarfed in size and might by its northern neighbor to do? Mexico's President Enrique Pena Nieto, who's set to meet with Trump next week, says he'll neither fight nor capitulate.

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PRES ENRIQUE PENA NIETO: (Speaking Spanish).

KAHN: "Neither confrontation nor submission. Dialogue and negotiation is the solution," Pena Nieto told a group of business and political leaders gathered at his official residence earlier this week. Such a middle-of-the-road stance hasn't won Pena Nieto many friends in Mexico. His popularity tanked last year when he invited Trump to Mexico. It dropped to new lows this year, at 12 percent approval rating, due in part to his perceived weak response to Trump's continuing provocations.

Those have sent the peso into a downward spiral and spooked foreign investment here. But the peso's fast fall and rising inflation now have even some of Pena Nieto's political opponents softening their tone.

GABRIELA CUEVAS: I think we should not be in a hurry for such important issues.

KAHN: Gabriela Cuevas, the head of Mexico's Senate Foreign Relations Committee and a member of the opposition PAN party, says much is at stake in these negotiations.

CUEVAS: It is not like a two-month negotiation. Come on, we are going to have a lot of news for the next two months, even years.

KAHN: She says she was encouraged that Pena Nieto outlined several objectives that must be met in any negotiations between Mexico and the Trump administration, including no wall, respect for Mexican migrants in the U.S. and their money they send back home. Economist Luis de la Calle, who helped negotiate NAFTA back in 1994, says despite Mexico's smaller economy, it does have some cards to play at the negotiation table.

Mexico is the largest market for U.S. wheat, corn, pork and poultry to name a few agricultural products, most of which are grown in Republican states with politicians likely to give President Trump an earful over market losses.

LUIS DE LA CALLE: This idea that it's an unbalanced negotiation because Mexico is the junior partner is not necessarily the case.

KAHN: De la Calle says if Trump rips up NAFTA, tariffs will be placed on both countries' goods, according to rules outlined by the World Trade Organization. In those, he says, Mexico pays far lower duties than the U.S., in some cases by a factor of three. Perhaps testing the water for a tougher tone, Mexico's commerce and foreign ministers both said if negotiations don't go well, perhaps it will be Mexico that walks away from the table and the Free Trade Agreement. Carrie Kahn, NPR News, Mexico City. Transcript provided by NPR, Copyright NPR.