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Mexico says NAFTA deal unlikely this week, signing possible this year

Reuters  |  MEXICO CITY 

CITY (Reuters) - Mexico's said on Tuesday that he saw diminishing chances for a new ahead of a May 17 deadline to present a deal that could be signed by the current U.S.

has said that the Republican-controlled would need to be notified of a new NAFTA deal by Thursday to give lawmakers a chance of approving it before a newly elected takes over in January.

"It is not easy, we do not think we will have it by Thursday," Mexican told broadcaster

"We will keep negotiating, and in the moment that we have a good negotiation, we can close the deal ... independent of which Congress (the current or new) that will vote on it," he said.

Negotiators from the United States, and have been in intense talks since last month to try to reach a deal before upcoming U.S. Mexico's on July 1 also complicates talks.

Uncertainty over the future of NAFTA and the election has put pressure on the Mexican peso, Guajardo said.

Mexico's peso sank to its weakest level in over a year on Tuesday and the country's benchmark stock index fell about 1 percent to its lowest since early April.

"There are different moments to close the negotiation," Guajardo said. "It could be before the Mexican election on July 1, it could be just after."

Leftist is leading polls to win the presidential race, and his pick for economy minister, Graciela Marquez, said last month his administration would be willing to accept a NAFTA deal struck before the election.

If that is not possible, she said it would be better to complete the negotiation after the next government takes office at the start of December. Guajardo said the next government's team would need to be involved in any talks after July 1.

Canadian and U.S. on Monday discussed the possibility of bringing NAFTA talks to a "prompt conclusion."

Guajardo said negotiators were getting close to reaching a deal on rules for the auto sector under NAFTA.

However, talks still faced the hurdles of U.S. demands for a sunset clause that would allow NAFTA to expire if it is not renegotiated every five years, and the elimination of settlement panels for trade disputes.

More flexibility was needed for a deal, Guajardo said.

Kenneth Smith, the chief Mexican at the talks, said that for there were no deadlines in the revamp.

"Mexico's position since the start of the negotiation has been that we're not going to sacrifice the quality of the deal to conclude quickly," he told local radio.

Irrespective of the May 17 date mentioned by Ryan, there was still time to ratify a new NAFTA this year, Smith added.

"There's no question the possibility exists, we're interested and I think the and share this view," he said, speaking to broadcaster Enfoque Noticias.

Hanging over the talks has been a threat by the to impose and aluminum tariffs on its trade partners. Mexico and have been spared so far, although the latest exemption for them will run out at the end of May.

Smith noted that Mexico ran a deficit with the in trade in both metals and that his government would retaliate with equivalent measures against the "immediately" if tariffs or quotas were imposed.

(Reporting by and Dave Graham; Editing by Phil Berlowitz)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 15 2018. 22:12 IST
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