Tags: wilbur ross | mexico | peso | nafta

Wilbur Ross: Mexican Peso Could Recover With Sensible Nafta Deal

Wilbur Ross: Mexican Peso Could Recover With Sensible Nafta Deal

 (AP/Mark Lennihan)

Friday, 03 March 2017 08:48 AM

The peso could recover “quite a lot” if Mexico and the U.S. can reach a sensible agreement on renegotiating the North American Free Trade Agreement, U.S. Commerce Secretary Wilbur Ross said.

“The peso has fallen a lot, mainly because of the fear of what will happen with Nafta,” Ross said in an interview on CNBC on Friday. “I believe that if we and the Mexicans make a very sensible trade agreement, the Mexican peso will recover quite a lot.”

The peso has declined almost 10 percent over the past year, boosting the cost of imports into Mexico, while making its exports more competitive. The currency rose 1.3 percent on Friday in the wake of Ross’s comments.

The Commerce Secretary said the first trade priority of Donald Trump’s administration is to re-negotiate Nafta, which Trump described on the campaign trail as the “worst” trade deal of all time. The administration has indicated that the target of the reforms will be Mexico while only tweaking ties with Canada, though specifics are scant.

The American priorities in negotiating Nafta will be tightening “up quite a bit” the rules of origin, dictating how many goods can come in from outside-Nafta nations but still receive the agreement’s tariff perks, which are now “too lenient,” said Ross. Talks to modernize the trade deal will also address mechanisms to ensure the peso-dollar exchange rate becomes more stable and explore ways for Mexican workers get better wages and living standards.

Facilitating Exports

“The first emphasis will be on facilitating U.S. exports to other countries, getting rid of both tariff and non-tariff barriers to trade,” said Ross. “The other side of that will be preventing illegally subsidized goods from coming in, and really enforcing it.”

The U.S. isn’t talking with China yet about trade, said Ross. China’s trade surplus has largely driven the country’s “economic miracle,” while Germany has been an “enormous beneficiary” of the weak euro, though it’s not currency manipulation, he said.

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The peso could recover "quite a lot" if Mexico and the U.S. can reach a sensible agreement on renegotiating the North American Free Trade Agreement, U.S. Commerce Secretary Wilbur Ross said.
wilbur ross, mexico, peso, nafta
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2017-48-03
Friday, 03 March 2017 08:48 AM
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