Multinationals in Mexico say trump unlikely to tear apart NAFTA
An organization comprising the 50 largest multinational companies operating in Mexico said on Wednesday that they would pay close attention to the actions taken by US President Donald Trump’s administration, but were not overly concerned and regarded the potential dismantling of the North American Free Trade Agreement (NAFTA) as unviable.
“It’s a reason to be very carefully observant, but we’re convinced that it’s a great opportunity for Mexico to reassess its strategic pillars in the trade area,” the president of the Executive Council on Global Enterprises (CEEG), Frederic Garcia, told EFE.
The CEEG comprises nearly 50 multinational firms that are market leaders in Mexico, including Coca-Cola, ExxonMobil and Microsoft, companies that provide 500,000 direct jobs and 1.5 million indirect jobs and account for 10 percent of the country’s gross domestic product (GDP), 11 percent of its exports and 40 percent of total foreign direct investment.
Top executives at those companies have informed the CEEG and Mexican President Enrique Peña Nieto that they have no intention of reducing their activities in the Aztec nation or ceasing to invest or produce, Garcia said, adding that a current pause on investment was due to temporary uncertainty.
In less than 15 years, the CEEG intends to bring about a more competitive Mexico by making the country more globalized, efficient and inclusive, Garcia said.
Specific objectives include making Mexico one of the world’s top five exporters and doubling its labor productivity, as well as doubling the nation’s GDP per capita and creating and sustaining a million new formal jobs annually.
With respect to NAFTA, a trade deal that has linked the United States, Mexico and Canada since 1994 but which Trump has repeatedly criticized as a destroyer of American jobs, the CEEG noted that nearly 150 organizations and companies in the US food and agriculture sector have urged the president to preserve the gains achieved as a result of that trade agreement.
Garcia also noted that in the auto industry the North American countries’ productive processes were closely integrated.
“I seriously doubt that President Trump would cast aside the relationship with Mexico,” he said, adding that in practice it would be very difficult to undo those trade ties.