As talks shift to Mexico City on Sept. 1, Mexico’s ambitions for a reworked North American Free Trade Agreement (or NAFTA II) will get the attention they deserve after a season dominated by U.S. and Canadian concerns.

With a population of close to 120 million people, Mexico is the second-largest of the “three amigos.” Its economy ranks among the 20 largest in the world.

And Mexico is thought to have the most to lose if the talks now underway should fail.

But Mexico comes into these negotiations stronger than is commonly thought.

For starters, Mexico and Canada share many of the same goals and concerns. They are a united front at the bargaining table.

For instance, Mexico City objects to a top U.S. priority of removing the existing dispute-resolution mechanism, known as Chapter 19. The mechanism provides for binational panels to settle complaints about dumping and countervailing duties.

Mexico also opposes any significant re-definition of “rules of origin,” another major U.S. goal. That refers to the amount of North American content in exported goods that originates within the three NAFTA partners, and thus qualifies for tariff-free trade.

In many industrial sectors, activity is so integrated among the three NAFTA countries that disruption of rules of origin would play havoc with supply chains in vehicle manufacturing, agriculture, forestry, financial services, and media and communications, among others.

Mexico and Canada are of like mind on those two critical issues.

Mexico also has muscle. Mexico imported $302 billion in U.S. goods in 2015. Many U.S. states rely on Mexico as their largest export market. (All figures in Canadian dollars.)

In the absence of NAFTA, the hardest-hit U.S. states would see their economies shrink between 5 and 15 per cent, according to a recent analysis by the U.K. Economist.

The U.S. is a house divided on NAFTA.

Anti-trade Democrats on Capitol Hill and their supporters in organized labour would shed no tears over the pact’s demise.

Otherwise, however, scrapping it and its demonstrable economic benefits is opposed by the U.S. auto industry, the U.S. farm lobby, most Fortune 500 corporations, American companies keen to boost exports to Mexico of U.S. shale oil and gas, and a Wall Street eager to invest in a newly privatized Mexican energy sector.

Mexico has more U.S. friends than it realized when Donald Trump, future U.S. president, was vilifying NAFTA on the campaign trail last year. And so, Mexico has gone beyond trying to protect the benefits it has under the deal. It is pushing for a modernized NAFTA II that secures even more benefits.

Mexico City proposes upgrades that include new standards for cross-border investment and protection of intellectual-property rights in the energy, financial services and telecommunications sectors. These make sense for all three partners.

Energy was scarcely mentioned in the original treaty because it was too politically sensitive at the time of ratification in 1993. Banking and other financial services were not as globally integrated as they are today. The Internet was in its infancy, and e-commerce was non-existent.

Mexico has negotiated bilateral trade deals with 45 countries, more than any country. Mexico’s negotiating team in these talks is battle-hardened.

So is Canada’s, fresh from negotiating the landmark Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Trans-Pacific Partnership (TPP). The TPP was close to fruition when Trump withdrew the U.S. on his third day in office.

By contrast, the U.S. negotiating team is spearheaded by anti-trade zealots Robert Lighthizer and Peter Navarro. They’ve actually demonized China and Germany even more than Mexico, as alleged currency manipulators.

That the Mexican and Canadian negotiators are united in their belief in open borders, and are seasoned in achieving mutually beneficial trade deals, gives them only limited advantage.

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Folks who believe in free trade, negotiating with people who don’t, holds the prospect of failed talks.

And the talks will fail if the U.S. is intransigent in seeking the “America First” deal Trump has promised Americans.

Everything you need to know about NAFTA in 3 Minutes. Why Donald Trump says NAFTA is a bad deal for the U.S. and what the negotiations could mean to Canada.

Trump’s options aren’t attractive if he walks away from negotiations that aren’t leading to a lopsided deal in America’s favour. Trump would probably revert to trying to withdraw the U.S. from NAFTA, which he came close to doing in April. And he issued that threat again on Tuesday, at a rally of his supporters in Phoenix.

“We’ll end up probably terminating NAFTA at some point,” Trump said.

But U.S. constitutional experts say the U.S. president lacks the authority to scrap a treaty without Congressional approval. U.S. courts would likely find that Trump was violating U.S. domestic law in attempting to withdraw the U.S., since only Congress can repeal laws of its creation.

And the current Congress has no intention of repealing the 1994 NAFTA Implementation Act.

Already, several G.O.P. lawmakers on Capitol Hill and in state capitals have called on Trump to modernize the 23-year-old deal, not scrap it. U.S. lawmakers don’t share Trump’s outrage over America’s $73-billion trade deficit with Mexico, which works out to mere 0.3 per cent of U.S. GDP.

In 2015, the U.S. Congressional Research Service concluded that “NAFTA did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters.”

Mexico not only took Trump’s latest outburst in stride, but grasped that Trump had blundered in issuing his threat just one week into the negotiations, rather than use it to break a stalemate at the 11th hour. The threat has now lost its potency.

Trump’s belligerence is “no surprise: we’re in a negotiation,” said Luis Videgaray, the Mexican foreign minister, this week. “Mexico will remain at the table with calmness, firmness, and in the national interest.”

NAFTA has become an exercise in waiting Trump out. He might face a hostile, Democratic-controlled Capitol Hill after next year’s elections. Already, some Republicans are preparing to challenge Trump for the 2020 presidential nomination — a remarkable turn just six months into a new U.S. presidential administration.

In the meantime, the real goal in these talks is to enable Trump to sign a NAFTA II and declare victory. To that end, Mexico has signaled a willingness to modestly alter the “rules of origin.” And Canada has opened the door to changes in the dispute-resolution mechanism to make it more effective.

Those changes would be mutually beneficial.

“The first NAFTA was like the 1974 Corvette,” Michael Camunez, a former assistant secretary of commerce in the Obama administration, told the Los Angeles Times this month.

Once innovative, it’s now out of date. A NAFTA II negotiated in a spirit of goodwill holds the potential, Camunez said, of being “like the Tesla.”

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