PUERTO VALLARTA, Mexico, (Reuters) – Led by Mexico, major Latin American nations pledged to deepen commercial and economic ties yesterday as they sought to counter the risk of a deepening trade war sparked by U.S. President Donald Trump’s “America First” policy.
Leaders of the Pacific Alliance and Mercosur trading blocs met in the Mexican resort city of Puerto Vallarta, seeking to present a united front against potential disruptions stemming from Trump’s threats to slap new tariffs on major markets.
“The aim was to strengthen the links between the two most important trade blocs in Latin America,” said outgoing Mexican President Enrique Pena Nieto, who has spent much of the past two years mired in trade negotiations with Trump.
“Today we’re sending the world a clear signal we’re moving onward with regional integration and free trade,” he added.
Chilean President Sebastian Pinera said that the four countries making up the Pacific Alliance trade bloc – Chile, Colombia, Mexico and Peru – would work to eliminate remaining tariffs on about 8 percent of products traded in the group.
Later this week, top Mexican officials will renew talks with the Trump administration in Washington aimed at renegotiating the North American Free Trade Agreement (NAFTA).
Mexico is heavily dependent on the United States as an export market and Trump’s threats to pull out of NAFTA have rattled investors and put pressure on the peso currency.
Pena Nieto said the Pacific Alliance agreed with Mercosur – made up of Brazil, Argentina, Uruguay and Paraguay – to explore new ways of cooperation to boost trade in areas of common interest.
Trump has slapped billions of dollars worth of duties on Chinese goods and is weighing fresh steps against auto imports.
The Trump administration yesterday said it would pay up to $12 billion to help U.S. farmers weather the growing trade battle with China, the European Union and others, a clear signal the president is determined to stick with tariffs.
Still, Jesus Seade, Mexican President-elect Andres Manuel Lopez Obrador’s incoming NAFTA negotiator, said on Tuesday he believed a new NAFTA deal could be reached in the next few months.
Chile’s Pinera said he met with aides to Lopez Obrador, and said he was confident the next Mexican president would remain committed to free trade.
“Mexico has always been a country committed to openness and integration and I believe that this will be maintained,” he said.