Nafta negotiation... ok, punitive taxes... no way, economy minister stresses
Mexico will walk out of negotiations over the North American Free Trade Agreement (Nafta) should the Trump administration decide to tax Mexico’s exports to the United States, Mexican Economy Minister Idlefonso Guajardo said this week.
“The moment they say we’re going to levy a 20-percent tax on cars, I’m getting up from the table,” he told reporters.
Guajardo said the recent visit to Mexico by Secretary of State Rex Tillerson left him with the impression that the idea of slapping punitive taxes on Mexican imports to the United States has little support among Trump’s cabinet. Proposals for a “border adjustment tax” have been aired by some of Trump’s collaborators, although most Republican legislators have rebuffed the idea.
Guajardo said he welcomed discussions to bring Nafta up to date, to cover areas such as information technology that did not exist when the treaty was signed in 1994. Improving safeguards for workers and the environment are other issues that can be improved, he said.
Guajardo, however, was adamant that neither the executive branch nor Congress would ever approve changes to the trade agreement that “went against Mexico’s interests.”
Remittances
President Enrique Peña Nieto and his close collaborators have repeatedly stated that Mexico will not pay for a border wall, and will resist all “underhand” methods of trying to extract money from this country.
This includes any attempt by Trump to tax or stop the flow of remittances to Mexico.
Stats released this week show that remittances sent home by Mexicans in the United States increased by 6.2 percent in January compared with the same month in 2016. Some analysts suggested that Mexican workers were fearful of possible legislation and are keen to get their spare dollars back home as quickly as possible,
Remittances sent to Mexico last year totaled $US27 billion and are vital to this country’s economy. Many families living on the breadline are only able to feed themselves properly thanks to money received from relatives working in the United States.
Any disruption to this flow of cash would put huge pressure on Mexico’s somewhat limited social welfare network, economists say.