Editor’s note: Looks like Mexico may risk upsetting the USMCA by negotiating with China sometime after their new president takes office.
Despite a provision in the U.S.-Mexico-Canada Agreement that poses a “hurdle,” Mexico is “quite likely” to open trade talks with China over the next few years, the chief NAFTA negotiator for the incoming Mexican president said on Wednesday.
[Anshu Siripurapu | October 15, 2018 | Inside US Trade]
“I don’t think it’s likely in the very near future. But I think it would be quite likely in the medium term,” Jesús Seade said in an interview with Inside U.S. Trade. “Within the life of this presidency, why not? In four years, why not? Right now, the agenda cannot be that. The agenda has to be to create confidence. Maybe a strengthened bilateral investment treaty and consultation mechanism — mechanisms to build confidence. But a free trade agreement? By all means. China already is very active, you know. They have free trade agreements with New Zealand, Australia, with Switzerland.”
Under Article 32.10 of USMCA, if any of the parties enters into a free trade agreement with a “non-market economy,” the others must be notified and be able to review the text while retaining the option of terminating the deal in favor of a bilateral that would be amended over a six-month notice period. Negotiations for bilateral investment treaties are not affected.
“It doesn’t automatically prevent Mexico, it doesn’t prevent Mexico, it gives the United States the right to pull out,” Seade said when asked if the provision was a violation of Mexican sovereignty. “So it’ll be our job to convince the United States that this is in Mexico’s interest without being to the detriment of our relationship or the interests of the United States. So it’s not quite a ban. But it’s a hurdle that we will have to be good negotiators to get the U.S. on board with the notion that we want to do that.”