New NAFTA deal could come within a month, says Mexico

There’s an 80% chance of a new NAFTA agreement in principle within a month, according to the Mexican minister leading the file.

Secretary of Economy Ildefonso Guajardo tells the Mexican network Televisa that he believes a deal is probable coming soon.

He says it won’t happen within days, nor—as some had hoped—by the end of this week, which would have been in time for national leaders Donald Trump, Justin Trudeau and Enrique Pena Nieto to make the announcement at the Summit of the Americas in Peru.

But Guajardo says negotiators from all three countries are now speaking constantly in what he describes as a permanent round of talks.

He says it will become clear by the first week of May whether an agreement in principle is possible this spring, after which point the talks would languish until 2019, while Mexico elects a new president and the U.S. elects a new Congress.

Guajardo warns nothing is guaranteed in this political environment. In an oblique reference to Trump and his social-media habits, Guajardo says policymakers sometimes find themselves scrambling to respond to the thoughts of a boss shared publicly at 6 a.m.

Other industry participants commented on potential thoughts from Canada’s central bank, which makes an announcement on April 18.

In an economics report published last Friday, TD director and senior economist Michael Dolega connected NAFTA negotiations with how the domestic economy is faring. He noted Canada’s strong jobs numbers for March. Also, wage growth has reached a “healthy” 3.1% year over year, he said.

“Such performance, while unlikely to put a fire under the Bank of Canada, should provide plenty of comfort for another rate rise in the summer and a couple more next year […],” said Dolega. He’d expect “a quicker tightening cycle” should NAFTA be signed soon.

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