MEXICO CITY (Reuters) -
Mexico’s trade minister will discuss the threat of U.S. steel import
tariffs with U.S. Commerce Secretary Wilbur Ross on Wednesday, two
sources said, adding to trade tensions during the latest push to
renegotiate the NAFTA trade deal.
The
meeting in Washington between Economy Minister Ildefonso Guajardo, who
oversees trade, and Ross comes as U.S., Mexican and Canadian officials
meet in Mexico City for a seventh round of negotiations to rework the
North American Free Trade Agreement.
In President Donald
Trump’s trade policy agenda presented to Congress on Wednesday, U.S.
trade envoy, Robert Lighthizer, pledged the administration would
continue to renegotiate NAFTA as part of efforts to seek fairer, more
reciprocal trade.
The NAFTA talks have crawled along for
the past six months, though officials say a number of less
controversial issues under discussion could be resolved in this round.
Trump has threatened to walk away from the $1.2 trillion treaty unless
major changes are made.
Trump is currently considering
Commerce Department proposals to impose steel and aluminum tariffs on
imports from China and elsewhere following a probe looking at whether
imports of the metals threatened U.S. national security.
A
Mexican official said the agenda would include the proposed steel
tariffs as well as the tomatoes trade, another area that has been dogged
by disputes and subject to periodic renegotiation.
If
the United States imposed steel tariffs, Mexico’s government would seek
to retaliate, the official said - just as it vowed last month to act
against a decision by Washington to slap tariffs on imported washing
machines and solar panels.
Trump authorized the
investigations in April after U.S. steel and aluminum manufacturers
complained they were being forced out of business due to excessive
foreign dumping.
The Commerce Department confirmed the
talks but did not elaborate on what topics would be discussed. Ross has
said he would not be surprised to see countries challenge any steel
tariffs at the World Trade Organization.
A statement will be issued after the Washington talks, a Mexican official said.
Among
the options before Trump is a tariff of at least 24 percent on steel
products from all countries. However, Trump could decide to exempt some
countries from any measures, including its NAFTA trading partners.
Canada’s
Prime Minister Justin Trudeau said in July that Trump told him that he
did not expect to subject Canadian steel and aluminum to tariffs on
national security grounds.
There
are concerns that stiff U.S. tariffs could raise global steel prices,
which would impact Mexico. While Mexico is a large steel importer, it
also exported approximately 4.5 million tonnes in 2016.
Meanwhile, Steve Verheul, Canada’s chief negotiator in the NAFTA talks, reported some advances in Mexico City.
“We’re making reasonably good progress so far,” he told journalists, without elaborating.
‘HARD TO ACHIEVE’
U.S.
trade officials met with auto industry executives in Washington on
Tuesday to discuss a contentious U.S. demand for higher content for
vehicles produced in North America, which NAFTA partners Canada and
Mexico say will be hard to achieve.
There were no major breakthroughs or policy changes discussed, one source with knowledge of the meetings said.
The
U.S. negotiator handling the autos content file, Jason Bernstein,
unexpectedly returned to Washington for consultations earlier this week.
It was unclear whether or when he would return to Mexico City.
Verheul
later said chief negotiators would on Wednesday discuss rules of
origin, which includes content requirements for finished products made
in North America.
One official with knowledge
of the talks said given Bernstein’s absence it was unclear whether
there would be time in the current round to deal with technical
discussions on moving the autos content debate forward.
The
possible delay in tackling the matter only underlines the slow progress
of the talks, which are supposed to wrap up by early April but look set
to go on for longer.
Lighthizer, Guajardo and Canadian
Foreign Minister Chrystia Freeland are due to join the negotiations for
the final day on Monday.
The current round is likely to
focus on closing chapters related to digital trade, telecommunications,
technical barriers to trade, good regulatory practices, and sanitary and
phytosanitary measures, according to a second official with knowledge
of the talks