This week’s article detailed Mexico’s reaction to the fourth round of NAFTA talks. The possibility of the United States pulling out of the agreement or Mexico and Canada not accepting the terms that the US puts forward, has prompted Mexico to start talks with other state actors. Mexico’s president, Enrique Pena Nieto, has already started talks with China, Argentina, and Chile for possible new mainstream trading partnerships. The potential collapse of NAFTA threatens the number of exports to the US by taking away their duty-free access. The ability for Mexican companies/factories to export products without being taxed has helped trade thrive between the two states. Thus, the end of NAFTA could cause a halt in products going to the US for finished assembly and into a finished product. Another high risk, is the possibility that Mexico may move production to Asia, and buying product parts there instead of in the US. Even though the US accounts for a large portion of Mexico’s economic activity and even if NAFTA ends the US will still engage in trade with Mexico, it is in Mexico’s best interest to widen their trade network to include new and profitable state actors. This is especially true if Mexican companies will have to pay taxes, both high and low, for products being shipped to the US.  For the US, I believe it would be advantages to look to negotiate a new agreement with Mexico as the US gains a lot of economic activity by using Mexican trading markets and would see a decline in revenue if a deal isn’t made.

Ayel

https://www.nytimes.com/2017/10/16/world/americas/mexico-nafta.html