World Economy

LatAm Counts Losses

LatAm  Counts LossesLatAm  Counts Losses

Mexico will be the biggest loser from North American Free Trade Agreement renegotiations, with a host of other Latin American countries set to suffer negatively from US President Donald Trump’s trade and economic nationalism, GTReview reported. Renegotiations over the 22-year old trade deal between Canada, Mexico and the US are set to commence in mid-August, with trade credit insurer Coface saying that Mexico is likely to be the initial target of Trump’s protectionist policies. This is based on the expectation that Trump will immediately target countries with which the US has a strong trade deficit. With this assumption, a Coface report says, “Mexico’s position is particularly sensitive”. This is a widely-held view: ING Bank says that Mexico’s trade is 20 times more dependent on the US than vice-versa. Coface notes that more than 80% of Mexico’s exports are sent to the US today, representing 24.4% of Mexico’s GDP. With this, the country becomes the Latin American economy with the largest trade surplus with the US: compared to the rest of the world, its surplus in 2016 is exceeded only by China, Japan and Germany.


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