05:17 GMT12 May 2021
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    Mexico has agreed to a trade deal with the European Union amid Washington’s push to renegotiate the North American Free Trade Agreement (NAFTA). The new agreement will eliminate tariffs for almost all goods traded between the EU and Mexico. Sputnik discussed this with Antonio Moreno, head of the business department at the University of Navarra.

    Sputnik: How do you assess the revamped Mexico-EU agreement? How profitable is it for both of them?

    Antonio Moreno: I think that it’s been moderated by the fact that Mexico, I think, is suffering the consequences of the new and likely forthcoming trade policies by the US. I think that they have a lot of questions lingering as to whether NAFTA is going to be changed, and of course in a way NAFTA has had some positive impact in Mexico, so if NAFTA now changes, I think, Mexico is going to suffer a lot. So it makes sense for them to diversify their trade partners and to revamp the previous trade agreements, including more products that they could export and import.

    Sputnik: So do you think this is going to fairly well compensate Mexico for what it lost in regards to the NAFTA deal?

    Antonio Moreno: Well I think it’s going to take some time, in the scenario in which it's going to be the US-Mexico trade agreement breaks in an important way, I think it’s going to take some time for Mexico to actually get back to the previous situation. Mexico has been one of the top exporters in the world over the last 10 years and I think it’s going to take time, because you need to build your network, you need to spend time with companies, and I think that the situation is a blow for Mexico, and it’s going to take time to mend the situation for them.

    Sputnik: And of course we have the US, Mexico and Canada expected to reach a new deal on NAFTA. Donald Trump has called the current deal the worst deal possible and the worst trade deal ever signed by the US. Do you think that the fact that you have now revamped the Mexico-EU agreement, it's positioning Mexico in a better way to go into the NAFTA renegotiations?

    Antonio Moreno: Well definitely, I think it’s going to give them some bargaining power. Actually, there’s one other thing that we should take into account, it's not only about trading more but the quality of the products that you export.

    Sputnik: What kind of deal do you think Mexico is looking to get, what kind of concessions will be considered by Mexico to the US? What are your thoughts on what the new deal is going to look like?

    Antonio Moreno: I think that we have to depart from this view that this renegotiation attempt is a bad scenario for Mexico, so it's about time for Mexico to have the list, the renegotiations list, or the list of changes to NAFTA. That’s probably not going to be possible, but I think going forward the smart thing would be to have an industrial strategy for Mexico to try to build these industries also based on what they can export to the US; but I think also to the EU because this diversification has an advantage for Mexico and for the EU. 

    READ MORE: Optimism in Ottawa: Canadian PM Trudeau Confident on NAFTA Despite US Scepticism

    Sputnik: Going forward then, do you think that it’s a pretty much a done deal that we’re going to see a NAFTA agreement that’s going to be good for Mexico and that the US will accept?

    Antonio Moreno: I don’t think that’s going to happen, I think Mr. Trump’s trading strategy has been, well, he’s putting everything into question, but when it comes to the actual renegotiations we are seeing more talks and more conversations than you deduce from his words, and now we’re seeing the secretary of treasury going to China and I think that’s also going to be the same thing with Mexico. Maybe in the end the renegotiations will not be that hard for Mexico even if the words from Mr Trump have been very, very harsh. 3.45 — 4.11 (can't make out) Going forward, I think, “very bigly,” the US may not go through the end, to an end that has many changes. I think it’s all a game of trying to use their political base, about what matters and what you have to write to get an agreement. Maybe it’s not going to be as many changes as thought. The near expectations of  the change in NAFTA is taking a toll on Mexico, that's the point I want to make, there a lot of fear and expectations of devaluation of the Mexican peso are high now.

    The views and opinions expressed in this article are solely those of the speaker and do not necessarily reflect those of Sputnik.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.


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