US anti-trade shift would hit world economy
The more protectionist trade policy being pushed by US presidential candidates could lead America to renege on global trade agreements and deal a blow to the world economy, Mexico’s economy minister said on Monday.
While not naming candidates, Economy Minister Ildefonso Guajardo referred to a proposal by Republican front runner Donald Trump to levy a 35-percent tariff on many Mexican goods, which Guajardo said would violate World Trade Organization agreements and spark chaos if enacted.
” will mean that you are willing to depart and break with the world trading system,” Guajardo told Reuters in an interview.
“If that is the case then the world is in trouble,” added Guajardo, who was in Washington for meetings with US and Canadian trade officials.
The United States is the world’s largest economy and its trade partners are concerned by an anti-trade rhetoric that is “more intense” than normally seen in US presidential campaigns, Guajardo said.
Trump has vowed to renegotiate the North American Free Trade Agreement (NAFTA) binding the US, Mexican and Canadian economies. Trump and Democratic front runner Hillary Clinton oppose a trade deal with the Asia-Pacific region recently negotiated by the Obama administration.
Guajardo said it was unclear if the candidates would follow through on their proposals if elected because trade wars would damage US exporters, including agriculture and auto parts companies.
“Eventually they would start to speak,” he said.
Mexico has been among the world’s most enthusiastic supporters of free trade since joining NAFTA in 1994. It subsequently signed trade deals with the European Union and Japan.
Mexico and the EU will likely launch talks in June to expand their trade deal, Guajardo said. Mexico wants better access for agricultural exports like bananas and hopes new rules can boost trade in services.
The EU is currently negotiating a trade deal with the United States while European parliaments are in the process of approving a deal with Canada.
Mexico would have liked to negotiate a larger pact between the North American countries and the Europeans, rather than a series of bilateral accords, Guajardo said, arguing that Mexico, Canada and the United States already function as an economic bloc.
The idea never got serious traction, however, so for now Mexico is keeping an eye on its NAFTA partners’ dealings with Europe and hopes to strike similar agreements.
“It will be feedback more or less for our negotiating objectives,” he said. – Reuters