Under pressure from President Donald Trump, Mexico is preparing to discuss changes to trade rules about a product's country of origin to try to avoid a disruptive fight with the United States over commerce, APA reports quoting Reuters.
As the two countries begin a difficult new relationship, Mexico sees possible common ground with Trump on the "rules of origin" of the North American Free Trade Agreement (NAFTA) that binds the two countries and Canada, several sources said.
Rules of origin are regulations setting out where trade products are sourced from. Although formal negotiations about NAFTA have not begun, the rules could eventually be altered to favor U.S. industry over competitors from outside North America, particularly in Asia.
Changes to those rules could help align Mexico with Trump's industrial strategy of boosting U.S. manufacturing jobs and dovetail with the Mexican government's calls to strengthen North American competitiveness.
It could also help pave the way for a broader deal with Trump over border security and immigration, Mexican officials believe.
Talks about NAFTA rules of origin will be a "very important" point of discussion between the two countries now that Trump is in office, a Mexican official said.
A White House official said: "As a general rule, it is in the best interests of the U.S. to insist on strong rules of origin provisions in pursuing bilateral negotiations. Lax rules of origin in proposed treaties like the now defunct Trans-Pacific Partnership shrink and weaken our supply chain and contribute to the offshoring of American jobs."
Mexican Foreign Minister Luis Videgaray and Economy Minister Ildefonso Guajardo will hold talks with top Trump officials in Washington on Wednesday and Thursday, where security, migration and trade will be discussed.
Fears of economic disaster have haunted Mexico since Trump won the presidency in November threatening to tear up NAFTA, impose protectionist tariffs and build a wall on the United States' southern border to halt illegal immigration.
While Mexico is reluctant to alter the 1994 trade accord, officials concede that some changes may be necessary to help keep trade open with the United States, which absorbs 80 percent of its exports.