NAFTA remarks send peso to new low

Commerce Secretary nominee says reopening trade agreement will be priority

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From left, Salinas, Bush and Mulroney at NAFTA signing.
From left, Salinas, Bush and Mulroney at NAFTA signing.

The peso hit a new record low yesterday after Donald Trump’s pick for United States Commerce Secretary said that NAFTA talks will begin soon after Trump’s inauguration as president tomorrow.

Trump’s risks to trade “don’t appear fully priced in,” said Citigroup Inc. analysts, according to a report by Bloomberg, after the peso fell 2% to 21.95 to the dollar.

Wilbur Ross said renegotiating the North American Trade Agreement will be a priority for the new administration.

His remarks also sent the Canadian dollar on its biggest slide since June. That the negotiations will happen “sooner rather than later caught the market offside,” said a foreign exchange strategist at Credit Suisse Groupe AG.

“Everything he [Ross] said tends to confirm fears that a NAFTA repeal as early as next week is a distinct possibility,” said Alvise Marino.

Ross’ comments came during his Senate confirmation hearing, at which he insisted he was “pro-trade.”

“I am not anti-trade. I am pro-trade,” Ross said. “But I am pro-sensible trade, not trade that is to the disadvantage of the American worker and to the American manufacturing community.”

He said NAFTA had never been transparently reviewed and suggested that such agreements should be systematically reopened.

The trade agreement was signed in January 1994 by Mexico president Carlos Salinas, United States president George H.W. Bush and Canadian prime minister Brian Mulroney.

Source : Mexico Daily News

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