Nafta Has `Absolute Support' of Mexican Presidential Frontrunner

(Bloomberg) -- Mexico’s leading presidential candidate Andres Manuel Lopez Obrador pledges “absolute support” for the North American Free Trade Agreement, his pick for finance minister said, as negotiators edge closer to a deal to renew it.

The candidate would also respect the Trans-Pacific Partnership, said Carlos Urzua, picked by Lopez Obrador to be his finance minister if he wins the July 1 election. While the frontrunner in polls has said he’d prefer to redo Nafta himself, Urzua acknowledged the benefits of a rapid conclusion to talks.

“There’s absolute support for Nafta,” Urzua said in Mexico City on Monday evening. “Lopez Obrador has said that hopefully it’s held up so we can finish it, but there are advantages because the market could become a bit nervous if there’s no Nafta and there are presidential elections at the same time.”

U.S. President Donald Trump has been pushing for a quick resolution to Nafta talks with Mexico and Canada, and negotiators are in Washington this week hoping to keep working until an accord is reached. Leaders of the countries say a deal could be completed within weeks, although differences remain on key issues.

While pledging new social programs, Urzua said he wouldn’t let the budget register a primary deficit. He also promised to respect all legally obtained oil contracts from a landmark energy opening to the private sector.

While oil tenders will be reviewed to ensure companies that the winning bid offered the best returns for the government, he said it was highly probable no contract will be revoked. Going forward, however, oil auctions would be suspended to assess whether it makes sense to keep expanding drilling for a non-renewable energy source given the fields that are available in Mexico.

Responding to questions about Lopez Obrador’s proposed three-year energy price freeze, Urzua admitted that pronounced peso weakness would present a challenge to keeping to such a policy.

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