Recent U.S. trade news has focused on new tariffs on solar panels and washing machines from China and South Korea. What may be going unnoticed is that the ban applies to all origins for these products. Given the NAFTA renegotiations, Mexican authorities might be forgiven for thinking that an exception could have been made for Mexico, which is the number-two seller of washing machines to the U.S. The Trump administration, however, is not into playing nice, as Canada has learned after the 18 percent tariff on Canadian lumber last year was followed a few weeks ago with a 10 percent tariff on Canadian paper products, for example.

Such moves from Washington are likely to dampen NAFTA talks beginning in Montreal. This is the sixth round of talks, with the initial plan calling for seven rounds that would end with a completed agreement in March—well before the potential monkey wrench of an administration change from Mexico’s general elections in July. Suffice it to say, the optimism that trade officials had previously shown at the start of other NAFTA talks is not in evidence this week.
With the U.S. claiming to be ready to walk away from NAFTA, Canada and Mexico are moving to diversify their trade. Both countries continued to work on the 11-country successor of the TPP agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), slated to be signed in March—sans the U.S.

Mexico has continued to explore South American opportunities for its sugar, and the negotiations for an updated trade agreement with the EU are continuing this year. Given that the EU has liberalized its own sugar market, the hopes for Europe as a new destination for Mexican sugar are arguably not unrealistic.

Also in the works: the 16-nation Regional Comprehensive Economic Partnership (RCEP). Under negotiation since 2011, this trade agreement could be signed as early as this year. Signatories will include Australia, Brunei, Cambodia, China, India, Indonesia, Japan, Laos Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Thailand, and Vietnam. No American nations need apply to this Asia-Pacific deal.

Countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

Countries in the Regional Comprehensive Economic Partnership (RCEP)

Posted by: Information Services
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