Finally, presidents Donald Trump and Enrique Peña Nieto convened again. The body language wasn’t good, but the meeting was productive. Both leaders agreed on starting talks on renegotiating NAFTA the earliest date available, and that will be on August 16. Despite the noise from Trump insisting on his promise that Mexico would pay for his planned border wall, the encounter allows hope for a general agreement on reworking the NAFTA by the end of 2017.
Mr. Trump’s speech against Mexico and changing statements about withdrawing from Nafta have persuaded Mexican officials to begin exploring alternative suppliers in several areas from agriculture to energy and manufacture.
US corn shipments to Mexico are faltering, and the country is no longer the biggest importer. Since Mexicans are not eating fewer tortillas, it could only be a sign that trade tensions are driving them into the arms of other suppliers. The oil and gas industry is also concerned. Mexico buys American natural gas to power at least a quarter of its electricity. The perspective of a gas cut off constitutes sort of a “mutually assured destruction scenario,” in which the American industry would lose a big deal of money. The price of gas would plummet in the US while Mexico would experience devastating energy shortages.
Trump’s past threats to withdraw from NAFTA were part of his negotiating style; those were his attempts to force concessions from the other parts. However, today such threats look hollow: if it were to leave from NAFTA, would be harder for America to be great again.