The News
Tuesday 18 of June 2024

NAFTA – No Piece of Cake

Ildefonso Guajardo
Ildefonso Guajardo
Renegotiations are not something that you start from scratch

The least we can say about Economy Secretary Ildefonso Guajardo is that he’s got a sense of humor.

On Wednesday he introduced the Mexican government’s front negotiators — or should we say re-negotiators — for the North American Free Trade Agreement (NAFTA) as a “dream team.”

Me being an old hag in NAFTA negotiations and having covered the first arrangement for The News back in the early 1990s, I can only watch and say to myself: grin and bear it.

Of course the awesome foursome Secretary Guajardo introduced are going to be under public scrutiny for the duration of the renegotiations which have to be held in secrecy given the give and take that takes place in very difficult procedures such as this one.

In fact, the original NAFTA negotiations were no different and we — I was a reporter covering the proceedings and spent lots of time at the Economy Secretariat building — knew that in negotiations there is no deal until the deal is agreed upon in writing.

But renegotiations are not something that you start from scratch and the three appointed negotiators have over 20 years of experience working for the government but none of them participated in the original negotiations headed by then-Commerce Secretary Jaime Serra Puche and Under-secretary Jaime Zabludovsky.

From the old NAFTA negotiations experience, I can tell you that there is no such thing as a “negotiating table” but a labyrinth of “side rooms” in which real negotiations take place among the trade representatives, who make it a passionate deal because it is not merely a “national interest” negotiation but the interests of at least 25 trades.

For your info, the original NAFTA was made up of 22 chapters covering commerce from agriculture to manufacturing and logistics and the vested interests among participants.

There is a belief that negotiations are among the three North American governments but that is a façade as the true negotiation take place among the chambers of commerce and industry representing each nation. It is these chambers — the side rooms — they tell negotiators where they stand and what they want and want not. What government negotiators do is act as middlemen to bring about an agreement among traders.

Secretary Guajardo’s “dream team” is made up of negotiator-in-chief Kenneth Smith Ramos — backed by Salvador Behar Lavalle as an “adjunct” negotiator along with Juan Carlos Baker Pineda. Guajardo will be at the helm of representing Mexico’s interests. The three officials have in common that they have represented the Economy Secretariat in Washington.

In the presentation press conference on Tuesday, the Economy Secretariat “has identified” the key issues coming up and the two great difficulties will be figuring out how to even up the surplus trade Mexico has over the United States and the original Chapter 19 which U.S. Trade Representative Robert Lightizer has said he wants to get rid of and which involves the trade disputes settlement panels.

Guajardo also pointed out a different potential conflict which is the elimination of “exclusion safeguards,” affecting temporary imports when it is considered they have increased significantly.

“Negotiations will not be a piece of cake. We’ll be confronting discussions in deep aiming at coming to a balance that will finally deliver us to a beneficial equation.”

Each of the subjects at hand is crucial, says Guajardo. “These are difficult issues we have to carry out with a very clear focus, meaning that the consequences are not just for Mexico, but also for the U.S. exporters and for the health of the region economies.”

The first round of negotiations will be held in Washington starting August 16-19 and the second will be in Mexico City on Sept 10, a date that is still pending confirmation.

As a personal commentary, this writer is particularly interested in the trans-border transportation chapter which never went into effect given the protectionist resistance of Jimmy Hoffa’s Teamsters Union. Of course, after 23 years there is no solution, but be sure that Mexican carriers will bring it to the negotiating table.

But for sure as you read this, all interested trade representatives are licking their chops and hoping to make the most out of which has been — to date — the greatest trade deal ever negotiated. Mark my words, not The Donald’s.

It will not be a renegotiation but seeking ways to improve what’s already at hand.