Lopez Obrador’s Nafta Negotiator Hopes for Deal in Next ‘Couple of Months’
(Bloomberg) -- The economist tapped by Mexico’s leftist presidential front-runner to lead Nafta talks if he wins Sunday’s election hopes that a deal can be reached within a couple of months and said the candidate’s team fundamentally agrees with the nation’s current negotiating positions.
Jesus Seade, an academic and former top official at the World Trade Organization, said Economy Minister Ildefonso Guajardo and his team have done a good job advocating for the country’s interests. Seade, who spoke Tuesday in an interview in Mexico City, said he met with Lopez Obrador for more than two hours last Thursday at a campaign event in Aguascalientes and on a flight returning to the capital, discussing the candidate’s Nafta views, economics and development.
The U.S. proposal for a $16 an hour wage for the automotive industry isn’t feasible and would cause distortions to the nation’s economy and labor market, Seade said. Lopez Obrador, who has said that he wants to see Mexicans earn more, is focused on raising Mexico’s minimum wage of 88.36 pesos ($4.44) a day to the entire nation and not only for one specific industry, Seade said.
“Fundamentally we are in complete agreement” with the publicly-known positions taken by the negotiating team of President Enrique Pena Nieto, Seade said. "What I have seen of the Mexican position is what it has to be. I don’t think these are partisan questions."
Lopez Obrador, who has lost two previous presidential elections, has 46 percent support in Bloomberg’s Poll Tracker, compared with 27 percent for Ricardo Anaya from an alliance of conservative and social democratic parties. Former finance minister Jose Antonio Meade of the ruling party has 24 percent backing. Guajardo has said that advisers from whoever becomes president-elect should be brought into Nafta negotiations, and that cabinet-level talks will probably pick up again next month. Pena Nieto isn’t eligible for re-election, and the new president will take office Dec. 1.
Seade lives in Hong Kong, where he is associate vice president for global affairs at the Chinese University of Hong Kong. He also spent a decade in Washington, where he was a senior adviser to the International Monetary Fund. He previously served as Mexico’s chief trade negotiator for the founding of the WTO and as the institution’s first deputy director-general in the early and mid 1990s, when Nafta was being negotiated and coming into force.
Agreement in Principle
Mexico, the U.S. and Canada began renegotiating Nafta last August at the demand of President Donald Trump, who says the deal drew factories south of the border, resulting in hundreds of thousands of lost American jobs. He’s promised to negotiate a better agreement or withdraw.
"I would hope to be right in thinking that one can have an agreement within a couple of months, or an agreement on the main issues, an agreement in principle," Seade said.
U.S. Trade Representative Robert Lighthizer’s proposals have been focused on increasing Mexican labor costs and providing incentives for auto manufacturers to either move production back to America or at least stop investing so much south of the border. Other thorny topics include dispute resolution, access to U.S. procurement deals, seasonal barriers to agriculture trade and a clause that would terminate Nafta after five years unless the nations agree to continue.
On cars, Seade said raising the regional content minimum from the current 62.5 percent “is appropriate.” He said wages shouldn’t be part of those rules.
Seade said he couldn’t speak about specifics of how the countries can get to a deal until he sits down with his partners from the two other countries and meets with the current Mexican negotiating team. The time between the Mexican election and the U.S. mid-term Congressional vote in November presents a good window to try to get a Nafta deal, he said, adding “there has to be a way to break the impasse and bring this to a resolution.”
Seade says he’s known Lighthizer for more than two decades and likes him. “He’s somebody for whom I’ve always kept a very fond recollection as being clever and fair, and even witty,” Seade said.
Currently in Mexico City, Seade is teaching a summer course on international trade at Mexico’s Autonomous Institute of Technology, or ITAM, a private university.
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