April 12, 2019 / 1:49 PM / 4 months ago

Mexico, U.S. discuss NAFTA replacement, border delays

MERIDA, Mexico (Reuters) - Mexican government and business leaders met with U.S. counterparts for a second straight day on Friday, seeking to resolve border delays hurting commerce, hasten ratification of a trade deal, and address metals tariffs.

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador speaks with Mexican Foreign Minister Marcelo Ebrard and Mexican Economy Minister Graciela Marquez during a meeting with industry bosses and members of his cabinet to discuss the new administration's policy on the minimum wage at National Palace in Mexico City, Mexico, December 17, 2018. REUTERS/Edgard Garrido/File Photo

The talks coincide with renewed tensions over trade and the U.S.-Mexico border after two years of uncertainty sparked by President Donald Trump’s demand to renegotiate the North American Free Trade Agreement (NAFTA).

Officials including U.S. Commerce Secretary Wilbur Ross and Mexican Economy Minister Graciela Marquez are meeting on the sidelines of the so-called U.S.-Mexico CEO Dialogue in the Mexican city of Merida in the Yucatan peninsula.

Discussions are centering on ratification of the deal agreed to replace NAFTA, the United States-Mexico-Canada Agreement (USMCA), as well as a dispute over tomato trade and the steel and aluminum tariffs the Trump administration imposed on Mexico nearly a year ago under the “Section 232,” Marquez told Reuters.

Marquez will be able to tout a workers’ rights bill that Mexico’s lower house of Congress approved late on Thursday, legislation that U.S. House Speaker Nancy Pelosi has called key to winning over Democrats wary of USMCA.

Officials are also discussing delays at the border which have cost businesses on both sides millions of dollars.

Slowdowns began late last month after Trump threatened to close the border if Mexico did not halt a surge of people, mostly Central Americans, seeking asylum in the United States. In the end, his administration reassigned several hundred border agents to handle the influx of migrants, creating staffing shortages that triggered long delays.

Mexican President Andres Manuel Lopez Obrador said at his regular morning news conference in anticipation of the talks in Merida, “And I expect if there’s a problem with the time it’s taking for goods to be transported and pass customs, that things will gradually return to normal.”

U.S. Customs and Border Protection will send about 100 agents to the border to speed up crossing times, a Democratic U.S. representative said on Thursday.

REFINERY

U.S. Deputy Energy Secretary Dan Brouillette met Mexico’s Energy Minister Rocio Nahle and later told reporters that she had indicated to him that her government did not plan to roll back an energy overhaul passed by the previous administration.

The 2013-14 reform opened up oil production and exploration to private capital, drawing significant interest from U.S. investors. At the time, Lopez Obrador roundly attacked the reform. However, he has since said he will give private operators time to show that they can increase output.

Lopez Obrador wants to revive state oil company Pemex and plans to build an $8 billion refinery in his home state of Tabasco. A U.S. embassy spokesman said that Mexican officials hoped to help fund the project by reducing tax evasion.

Mexico is eager to drum up investor interest in strategic projects in its southeastern states and allay any fears about how Lopez Obrador has been managing the Mexican economy, Latin America’s second largest, since taking office in December.

Lopez Obrador is scheduled to give closing remarks at the event later in the day.

Economy Minister Marquez said fabricated structured steel would also be discussed after the U.S. International Trade Commission said last month that domestic producers were being harmed by imports of the product from Canada, China and Mexico.

Reporting by Anthony Esposito; Editing by Steve Orlofsky

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