MEXICO CITY – Economist Luis de la Calle said in an interview with EFE on Tuesday that if President Donald Trump does not destroy North American integration, Mexico could become the No. 1 buyer of US goods in five years and a platform for American businesses to conquer the Chinese market.
De la Calle, a former economy undersecretary and trade official at the Mexican Embassy in Washington, has become one of the go-to people in this country since Trump proposed revising the North American Free Trade Agreement (NAFTA).
The economist helped design NAFTA, which took effect on Jan. 1, 1994, and created a trade bloc among the US, Mexico and Canada.
Trump has called NAFTA the “worst trade deal in the history” of the US.
De la Calle, for his part, said it will take several months to start talks on overhauling NAFTA due to institutional obstacles in the US.
“To start, negotiations require notifying Congress 90 days in advance,” a step normally taken by the US trade representative, De la Calle said.
Robert Lighthizer, who was tapped by Trump for the critical trade post, “has still not been confirmed by the Senate” since he needs “a waiver” from Congress because did work for foreign governments – Brazil and China – in the past, the economist said.
The administration must then publish the agreement with Congress on the goals of the negotiations in the Federal Register and let a period of 30 days pass, De la Calle said.
Trump’s threat to impose a 35 percent tariff on automobiles imported from Mexico is “completely hollow,” but the message had an effect on the value of the peso and Mexican securities markets, De la Calle said.
The financial markets, however, “are learning that Donald Trump’s tweets are not public policy,” the economist said.
A US exit from NAFTA would would require the parties to adopt tariffs agreed to under the World Trade Organization (WTO), De la Calle said.
“When we reached the treaty 25 years ago, Mexico was a closed economy and the United States an open economy. We’re the ones who have opened up,” the trade expert said.
De la Calle noted that “China is the top exporter to the United States and does not have an FTA with them,” while “Mexico is a big buyer in the United States.”
“Today, we’re the No. 2 market in the world for the US and in five years, if Trump doesn’t wreck the relationship, we’ll be the No. 1,” De la Calle said.