Mexico's Economic Secretary Says NAFTA Needs To Be Modernized

Ildefonso Guajardo Villarreal tells Rachel Martin the North American Free Trade Agreement needs to be updated, but that tariffs and insisting Mexico fund a border wall will poison renegotiations.

RACHEL MARTIN, HOST:

As a candidate, Donald Trump said he was going to rip up the North American Free Trade Agreement, or NAFTA. As president, he has walked that back, saying instead that the 24-year-old trade agreement just needs to be updated and modernized. I spoke with Mexico's secretary of the economy recently, Ildefonso Guajardo, and he actually agrees with President Trump on that point. But just how each side defines modernize is going to be the key to renegotiating the deal.

SECRETARY OF ECONOMY ILDEFONSO GUAJARDO: Just to give you an example, when we negotiated NAFTA, the U.S. had not found shale oil or shale gas. So today, the realities in the energy market are completely different. E-commerce, telecom, those things have to be captured by the new NAFTA.

MARTIN: What would be unacceptable in a renegotiation?

GUAJARDO: Well, basically we have to say that this negotiation is about how to move forward and therefore anything that has to do with all ways and all views of trade, like trade management instruments, like reimposing restrictions to trade expansions, like using tariffs. Tariffs have been eliminating through the last 22 years in NAFTA.

MARTIN: What about the wall? How concerned are you that pressuring Mexico to pay for that wall could derail talks around renegotiating NAFTA?

GUAJARDO: Well, I think that now is quite clear, the position of the - of Mexico on the wall. Obviously, you are in your own right to build the wall, even if I don't like it as a neighbor and I don't think it will solve anything. But you have to find ways to pay for it. But we, Mexicans, we will not pay for it.

MARTIN: If Mexico doesn't get what it needs from a NAFTA renegotiation, would you be prepared to walk away?

GUAJARDO: Well, let me first clarify that NAFTA is a trilateral agreement. The decision of walking away is not of Mexico or Canada. The decision of walking away is of the U.S. We are going to be engaged in a constructive, positive way to try to get a win-win in this negotiation of NAFTA. At the end of the day, we have obviously our own political realities that will not allow us to approve something that is not in the benefit of everybody.

MARTIN: What leverage does Mexico have in these conversations with the United States? Will Mexico stop cooperating on security and immigration, for example?

GUAJARDO: Well, basically - I'm not the minister in charge of those areas. But you cannot expect that if we are treated badly trade-wise, we will persist in collaborating in other parts of the bilateral agenda.

MARTIN: What has Mexico learned about negotiating with President Trump in the last few months, especially on trade issues? Reading his behavior, trying to decipher tweets, what lessons have you learned?

GUAJARDO: Well, there is an old tool that has become very handy that is called strategic patience, which is do not overreact in the short-term. Take your time. See what is the underlying, real message. And then once the reality is represented by actions, then decide how you are going to react to those actions.

MARTIN: Are you optimistic?

GUAJARDO: I cannot describe my position as optimistic. I will say that it's moderately positive because we believe we can construct solutions that will work for both countries.

MARTIN: Ildefonso Guajardo, he is Mexico's secretary of economy. Thank you so much for your time, sir.

GUAJARDO: Thank you for the opportunity.

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