by Edna Alcantara, Pei Jianrong
MEXICO CITY, April 9 (Xinhua) -- Mexico has potentially "much to gain" from upcoming North American Free Trade Agreement (NAFTA) negotiations with the United States, an expert said.
Enrique Dussel Peters, coordinator of the China-Mexico Studies Center (Cechimex) at the National Autonomous University of Mexico (UNAM), told Xinhua in a recent interview that the talks offer Mexico a chance to redefine its relationship with its northern neighbor.
Mexico first resisted U.S. President Donald Trump's call to renegotiate NAFTA, fearing it stood to lose from the proposal. But Dussel believes the opposite could be true.
"What if we take Mr. Donald Trump seriously and discuss expanding and deepening NAFTA? I believe Mexico has much to gain (and) to offer," Dussel said.
NAFTA, which went into effect in 1994, established a free-trade zone between Mexico, the United States and Canada, that lowered the cost of imports, benefiting consumers and producers.
However, Trump maintains the agreement allowed Mexican industry to thrive at the cost of U.S. jobs, since significantly lower wages south of the border led companies to relocate there.
The negotiations could go a number of ways, with the most appealing scenario seeing the three partners reach a new consensus on NAFTA, and the worst seeing NAFTA scrapped, said Dussel.
"Trump wants jobs and investment. We can say the same: we want to generate jobs, generate technology and also generate exports. So let's discuss how to go about it," said Dussel.
However, if NAFTA ceases to exit, it will not spell the same fate for Mexico, he said.
"Mexico will not vanish, nothing is going to happen," although some believe that it would push Mexico into "the abyss," he said. Chances are that in the absence of NAFTA or a similar deal, "tariff costs will rise."
In 2016, Mexico paid the United States a tariff rate of 0.12 percent on its exports, and that rate would likely reach 3.25 percent if NAFTA falls apart, he said.
Dussel believes NAFTA should be renegotiated, especially to bolster certain Mexican productive sectors, such as agriculture, toys, furniture, textiles and footwear, which "have been virtually wiped out in the two decades of NAFTA, because Mexico has been unable to compete with the United States" in those areas.
The true extent of the treaty's impact on these sectors "is not known for sure, as Mexico does not have a public assessment of NAFTA and its real impact on the economy," said Dussel.
"Mexico should make it clear to the United States that we are not to blame for the lack of jobs (there), since they were probably lost to technology, which has reduced man hours, for example, in manufacturing," said Dussel.
"It is possible to dialogue and to establish a serious agenda that maybe includes increases in added value so that the products we make can be taken into account regionally," he added.
