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Mexico Expands Trade Talks With U.S. Replacement Countries

South America countries hope to gain Mexico access.

As the Trump administration seeks an exit from the North American Trade Agreement (NAFTA), Mexico aggressively tries to seek other partners to have alternative customers for its industrial products and different food suppliers.

Argentinian newspaper La Nación reported this week that Mexican diplomats and authorities from the South American country have advanced significantly on negotiations related to trade, sanitary measures, intellectual property, investments, and access to goods and services.

It would not be an official trade agreement because an official full bilateral trade agreement would require including all members of the Common Market of the South (Mercosur) other than Argentina, which are Paraguay, Brazil, and Uruguay. On the other hand, the scope of this agreement would be quite similar, in the words of Juan Carlos Baker, Mexico’s foreign minister. He explains that both countries would do an Agreement of Economic Complementation.

“It would be almost as ambitious as a Free Trade Agreement. Mexico, Argentina, and Brazil are the three largest economies in Latin America. The exchange of Mexico and Argentina is minimal – just $2.3 billion – and Mexico has a surplus,” Baker told La Nación.

Mexico, Brazil, and Argentina currently have Agreements of Economic Complementation, but they’re limited to the auto sector; trade of agricultural products is insignificant. 

Though there is a fluid dialogue, specifics were not discussed. According to local sources, the negotiations started in meetings between Mexico’s president, Enrique Peña Nieto, and the president of Argentina, Mauricio Macri, last year – prior to the inauguration of president Trump.

Macri Squeezes Lemons out of Trump

This week, the U.S. secretary of Trade, Wilbur Ross, promised to lift any restrictions on Argentinian lemons to Argentina’s production minister, Francisco Cabrera, after the Trump meeting with the president of Argentina, Mauricio Macri.

On Thursday, Macri made an official visit to the White House. President Trump offered praise for Macri during the visit: “This is a man who loves his people.”

Regarding food and agriculture business, they had two topics on the agenda: biodiesel and lemons. Macri wished to release Argentinian lemons and urged Trump to drop any investigation related to dumping of biofuels. The entrance of lemons from Argentina was suspended as the new administration took power in the U.S.

Prior to being politicians, both leaders were businessmen and had a long-time relationship. They almost shared a real state enterprise in New York City, but they fought over the deal and broke a friendship of years. After Trump was elected, Macri restarted the relationship with a phone call to congratulate him on the victory.

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