By RICARDO CASTILLO
Hold the tequila!
During the bilateral U.S.-Mexico celebration on Monday, Aug. 27, because the administrations of Donald Trump and Enrique Peña Nieto had come to agreement, Mexico’s Peña Nieto invited The Don to a tequila toast that the U.S. president referred as to the new Mexico-U.S. Trade Agreement.
In fact, Mexico’s still greenhorn diplomat, Foreign Relations Secretary Luis Videgaray, went on to say that, regardless of whatever happened, Mexico had struck a deal with the United States and would not be responsible for what would transpire between Canada and Washington during the remaining time for the proposed negotiations, a period which ends today, Friday, Aug. 31. In other words, Videgaray threw his Canadian colleague under the bus and left Ottawa to sink or swim on its own terms.
It was an added display of poor diplomacy when Mexican Ambassador to Canada Dionisio Pérez Jácome repeated Videgaray’s statement to the Canadian press without taking into consideration the fact that negotiations were still underway between Canada and the United States, and that Mexico’s two northern neighbors were still in talks to preserve unscathed the original nature of the North American Free Trade Agreement (NAFTA). As pundits in Mexico have noted, criticizing both Videgaray and Pérez Jácome’s slip of the tongue, a true diplomat would not make this mistake.
Beyond that, if all goes well, U.S. Trade Representative Robert Lighthizer should soon be sending the document to the U.S. Senate for a revamped NAFTA. The Senate is likely not to accept a two-nation free trade agreement since its authorization is for a trilateral one. We’ll see what comes out of Lighthizer’s pitch.
Canadians, however, criticized Mexico for “ceding” in some areas, the principal concession being Chapter 19 of NAFTA, which in the past has worked extremely well. It is the chapter that Canada insisted on from the beginning back in the early 1990s, and even with the original 1986 bilateral Canada-U.S. FTA. Having independent arbitration panels has kept NAFTA going well, but with Mexico ceding on it now, all commercial arbitration will now go to U.S. courts, where there could be bias in favor of U.S. plaintiffs.
Mexico also ceded on things that had irked Trump and provoked him to call NAFTA “the worst deal ever” for the United States. And that’s the source of the new materials origin clause, requiring set percentages of “North American” (read: U.S.) input in auto manufacturing. The quota was hiked from 62.5 to 75 percent, obviously favoring the United States. Apparently, Mexican auto manufacturing plants were in agreement with that condition, as well as not agreeing to not compete with auto assembly lines in the United States where workers make more than $16 dollars an hour. Mexico still cannot afford to pay those wages and is not competitive on that issue. Canada – and Canadian unions – are pretty much in agreement with that.
Another issue that was settled with Mexico was the so-called “sunset clause,” under which the United States wanted to bring NAFTA to a halt every five years and start renegotiations all over again.
In the final stage of the negotiations, Mexico President-elect Andrés Manuel López Obrador (AMLO) sent an “observer” to join main negotiator Ildefonso Guajardo. That observer was Jesús Seade Kuri, who ended up participating in the process. In fact, Videgaray says that it was Seade Kuri who came up with the idea of extending the new negotiated deal to a 16-year life with revisions every six years rather than every five, as the United States wanted. Seade Kuri’s suggestion was accepted by Lighthizer and paved the path for the definitive understanding that there is a deal.
But we still have to wait for Canada to decide what to do. Canada has presidential elections coming up in 2019, and there’s a solid group of staunch conservatives who want to oust that country’s current prime minister, Justin Trudeau.
But as Seade Kuri noted, quoting baseball great Yogi Berra and, more recently, singer Lenny Kravitz: “It ain’t over till it’s over.”
So for now, let’s hold off on those tequila shots!