Mexico seeks to assure China new US trade deal won't block other economic relations

Foreign Minister Luis Videgaray tells Chinese counterpart Wang Yi that replacement for Nafta does not stop Mexico reaching an agreement with other countries

PUBLISHED : Sunday, 14 October, 2018, 4:26pm
UPDATED : Sunday, 14 October, 2018, 10:15pm

Mexico’s Foreign Minister Luis Videgaray told his Chinese counterpart in a phone call on Saturday that Mexico’s new trade deal with the United States and Canada would not impede economic relations with other countries, according to a foreign ministry statement.

The pact set to replace the North American Free Trade Agreement outlines that if one of the partners enters a free-trade deal with a “non-market” country such as China, the other two can quit within six months and form their own bilateral accord.

The mechanism would support US President Donald Trump’s efforts to isolate China economically amid an escalating tariff war between the two economic powerhouses, and give Washington an effective veto on any China trade deal by Canada or Mexico.

US ready to squeeze China partners with ‘poison pill’ trade deals

Videgaray did not detail whether Mexico would seek such a deal, but said the new pact, called the US-Mexico-Canada Agreement (USMCA), would not block bilateral accords with countries not included in the deal.

“Videgaray emphasised that none of its conditions constitute an obstacle for bilateral relations or economic exchanges that Mexico, as a sovereign state, maintains with other nations,” he told his Chinese counterpart Wang Yi, according to the statement.

A statement published on the website of China’s Ministry of Foreign Affairs on Sunday said Wang described China and Mexico as “all-round strategic partners”, and noted that had both consistently supported, understood and trusted each other on major matters.

Attempt to isolate China from world trade system ‘will not work’

“Any bilateral and multilateral free trade agreements should not be directed against third parties, nor restrict other members’ legitimate rights and interests, and further, should not be exclusionary,” the statement said, quoting Wang.

China and Mexico are both emerging market countries and should uphold multilateralism and the free-trade system, the statement said.

US Commerce Secretary Wilbur Ross has called the provision in the deal with Mexico and Canada a “poison pill” that could be replicated in other agreements.