Mexican "hot bite" - Redo NAFTA and recession impact on exports

If Clinton or Obama wins, will the U.S. renegotiate NAFTA? Perhaps so. Will the U.S. recession hurt Mexican exporters? Most assuredly. Here is a link to a summary of Mexican press reports from the USDA FAS office in Mexico City. From Hot Bites:

Jack Sweney, the former Vice-president of the American Chamber of Commerce (AmCham), recently said that the agricultural sectors did not make any changes to increase their productivity during the 14 years that NAFTA has been in effect. Beginning this year, the tariff rate quotas (TRQ) were eliminated so Mexico could import yellow corn from the United States with no restrictions. Sweney, who participated in the NAFTA negotiations in 1993, onfirmed that legally Mexico, the United States and Canada can renegotiate the agreement. However, commercially it is not convenient. The three countries recently formed a group to renegotiate NAFTA, and they are confident they can do so as long as a democratic candidate wins the U.S. presidency. Sweney commented that a renegotiation would have to start at the top with each President. “The arguments against the treaty, which have been exposed by the legislators, are the same arguments they used during the negotiation in 1993,” said Welcome to Hot Bites from Mexico, a weekly review of issues of interest to the U.S. agricultural community. The topics covered in this report reflect developments in Mexico that have been garnered during travel around the country, reported in the media, or offered by host country officials and agricultural analysts. Readers should understand that press articles are included in this report to provide insights into the Mexican "mood" facing U.S. agricultural exporters. Significant issues will be expanded upon in subsequent reports from this office. DISCLAIMER: Any press summary contained herein does NOT reflect USDA’s, the U.S. Embassy’s, or another U.S. Government agency’s point of view or official policy. “Th e legislators can review the NAFTA agreement, but I doubt that they will try to renegotiate it,” said Sweney. (Source: El Universal; 03/12/2008).

Members of the Mexican Lower House requested a series of hearings with the Secretaries of Agriculture and Economy, so that they can explain the impact of NAFTA’s full implementation on Mexico’s agricultural sector. Representative Hector Padilla, President of the Agriculture Committee, explained that the hearings may take up to three days in order to define and, hopefully, implement adequate policies to alleviate the problems faced by agricultural workers. He added that during the hearings they will invite state government officials, agricultural workers’ associations and related industry members. (Source: El Sol De Mexico, 3/10/08).

Jaime Yesaki, President of the National Agricultural Council (CNA), said that the economic slow down in the U.S. could impact the Mexican agricultural sector with a reduction in exports to the U.S. and Canada. CNA’s President stated that 85 percent of Mexico’s exports go to the U.S., which is why a change in the economy and incomes of the Americans would impact the Mexican agricultural sector. “With the economic slow down, we will be affected in two ways: with exports and from investment,” said Yesaki. “There would be less investment and less credits; therefore, we have to look for new markets because we depend on the United States too much.” Yesaki said that the impact of the economic slow down will be felt during the middle of the year. (Source: Reforma ; 03/13/2008)