Mexico’s top presidential candidates launched their campaigns today vowing to take a harder line against Donald Trump, with the leftist front-runner vowing his country is done being the US president’s “pinata.”

Just as candidates were putting the finishing touches on their opening campaign speeches for Mexico’s July 1 elections, Trump crashed the kick-off party via Twitter, accusing the country of doing “very little” to stop illegal migration and drugs, and renewing his threat to axe the North American Free Trade Agreement (NAFTA).

The veteran leftist leading in the polls, Andres Manuel Lopez Obrador, and his conservative rival, Ricardo Anaya, both hit back hard at the Republican president, whose anti-Mexican diatribes and insistence that Mexico pay for his planned border wall have made him supremely unpopular here.

“We are going to be very respectful toward the United States government, but we are also going to demand that (the United States) respect Mexicans,” Lopez Obrador told a cheering crowd in Ciudad Juarez, on the US border.

“Neither Mexico nor its people will be the pinata of any foreign government.”

Lopez Obrador, a former Mexico City mayor, repeated his long-standing criticism of Trump’s planned border wall.
“Let this be heard near and far: neither security issues nor social problems can be resolved with walls,” he said, condemning Trump’s “mistaken foreign policy” and “contemptuous attitude toward Mexicans.”

Anaya, who is locked in a brutal battle for second place with ruling party candidate Jose Antonio Meade, vowed to answer Trump with a “strong and dignified stance,” and defied the US president to take action on security issues on his own side of the border.

“Just as the United States is worried about undocumented migrants, Mexico is worried about gun trafficking,” he said.

“Eighty percent of the guns used to kill people in our country come from the United States,” he added, in reference to a wave of drug cartel-fueled violence that has left more than 200,000 people dead in Mexico since 2006.

MEXICO CITY (Reuters) – U.S. trade negotiators have floated a plan to introduce rules under a reworked NAFTA that stipulate a certain amount of automotive production must be carried out in areas paying higher salaries, two sources familiar with the matter said.

Setting such wage requirements for the auto industry under the North American Free Trade Agreement could benefit the United States and Canada, whose trade unions say that lower Mexican pay has caused a drift in manufacturing capacity to Mexico.

The U.S. plan aims to explore what percentage of output could be in areas paying higher salaries, and at what levels of remuneration the scheme could be targeted, said one of the two sources, who spoke on condition of anonymity.

Mexico’s government and its NAFTA partners were all analyzing the U.S. idea, the source said.

The news follows a week in which hopes have risen that the United States, Mexico and Canada could be closer to brokering agreement on one of the thorniest issues surrounding renegotiation of NAFTA – content levels for the auto industry.

Last week, industry sources said that the United States had withdrawn a divisive demand that at least 50 percent of NAFTA auto content should come from the United States.

The wage idea was floated after that, the sources said.

The United States, which also wants to raise the minimum auto content threshold for the NAFTA region to 85 percent from 62.5 percent, is exploring setting a wage floor at $15 per hour for the salary component, the second of the sources said.

However, if a deal is reachable, it would likely end up at a lower level than that, the source added.

Mexico’s economy ministry had no comment on the matter, a ministry spokesman said.

Alex Lawrence, a spokesman for Canadian Foreign Minister Chrystia Freeland, said it was a question for the office of U.S. Trade Representative (USTR) Robert Lighthizer “as to whether they are going to present something along those lines.”

A USTR spokeswoman could not immediately be reached for comment.

Freeland’s office said she would be meeting her NAFTA counterpart Mexican Economy Minister Ildefonso Guajardo on Friday in Toronto to discuss the ongoing renegotiation.

U.S. President Donald Trump has railed against jobs migrating from the United States to Mexico, and threatened to dump the trade deal if it cannot be reworked to his liking.

Making tariff-free access for the industry under NAFTA dependent on using higher-cost labor could reduce the allure of Mexico either by making the target unreachable, or by obliging auto makers to pay higher salaries to Mexican workers.

That could send more work to U.S. or Canadian plants.

Progress on auto rules have spurred optimism that the three sides, which have been locked in sluggish talks for months, could reach a deal “in principle” in the coming weeks.

No date has yet been agreed for another formal round of talks, one of the sources said. Mexico said earlier this month the talks had been tentatively set for April 8 in Washington.

MEXICO CITY (Reuters) – Mexican grocer Chedraui, a powerhouse in the fast-growing Latino market in the United States, said on Sunday it had bought smaller U.S. grocery store chain Fiesta Marts for an undisclosed amount.

Grupo Comercial Chedraui (CHDRAUIB.MX), as the company is formally know, announced the acquisition of Texas-based Fiesta Marts’ 63 stores in a brief statement on Sunday, emphasizing how the deal will strengthen its reach with Mexican-American shoppers.

Chedraui, based in Veracruz state, already runs 59 El Super grocery stores, mostly in California but also in other southwestern U.S. states, where shoppers are courted with Spanish-language ads promising the lowest price.

Burt Flickinger, a grocery sector consultant with Strategic Resource Group, said the acquisition will likely make the company the top retailer for Spanish-speaking shoppers in the United States, besting even retail giants like Walmart for the coveted demographic.

“El Super is (already) a fierce winner in the wars in the stores, he said, referring to the chain’s dominance with Latino consumers.

The group is the fastest growing consumer constituency in the United States, he added.

In Mexico, Chedraui operated 170 stores as of the end of last year.

The company said earlier this year it expects to invest around 3.8 percent of its consolidated revenue in assets, which it said should see sales growth reach as high as 6 percent in 2018.

Chedraui’s sales growth totaled 3.3 percent last year.

CLEBURNE — What began as a ribbon-cutting for a new investment by a Mexican company in Texas evolved into a lovefest for NAFTA on Tuesday when speaker after speaker extolled the basic principles behind the embattled program.

In remarks by everyone from Texas Gov. Greg Abbott to Mexico’s secretary of foreign affairs, the focus was on how the decades-old pact, which is being renegotiated, has benefited the United States and especially Texas.

The official occasion was the opening of a  150,000-square-foot state of the art production, manufacturing, and distribution facility built by Mexico’s largest pasta manufacturer, La Moderna.

Abbott said he sees the opening of the company’s first U.S. production plant as emblematic of the “multi-century relationship that has existed between Texas and Mexico” and the robust trade that has developed “to the benefit of Mexico, Texas and the United States.”

“We want to ensure that that trading relationship continues,” he said.

As a mariachi band provided the soundtrack for the celebration, Abbott joined Luis Videgaray Caso, Mexico’s secretary of foreign affairs, and executives with La Moderna, based in Toluca, Mexico.

The $50 million facility is part of a Mexico-to-U.S. investment pipeline that stood at $34.4 billion in 2016, up nearly 40 percent since 2010.

The project

First conceptualized five years ago, the Cleburne plant offers the growing pasta maker better access to U.S. markets and a hedge in case lumbering discussions about the fate of the North American Free Trade Agreement head south.

“We’re very enthusiastic about this project,” said Luis Miguel Monroy, chairman and chief executive of La Moderna who was in Cleburne for the celebration. “Most of our raw materials will come from Mexico. We needed a place close to the border. Baltimore and places farther east will not work as well as Dallas.”

Videgaray spoke of the strong trading relationship between Texas and Mexico, adding “we should not lose sight of what is at stake here.”

“I don’t know what is going to happen with NAFTA,” he said. “We’re very close to make-or-break time. Hopefully, we’ll get there.”

Location, demographics along with tax incentives from Johnson County, were among the early motivators that drew La Moderna to the Lone Star State. Since the 2016 presidential election, the project looks to pay additional dividends.

“We are better positioned now with a plant here in case NAFTA is not renewed,” said Monroy, 55, who joked that he plans to spend more time in North Texas and raise longhorn cattle.

La Moderna’s plant, located on 16.5 acres near a sprawling Walmart distribution center, will be able to make 8,818 pounds of product an hour and 7.4 million pounds in a month.  While well-known for its pasta, the company, a third-generation food maker, also makes cookies, flour and semolina, a wheat product used in pasta.

In five years, Monroy hopes to double his output levels by swelling into space that’s been built but is not yet being used.

“We have enough room to expand for many years to come,” he said in advance of the official ribbon cutting, marking a major expansion of the company his father purchased from the founders in 1959.

BRUSSELS (AP) — The European Union’s top trade official says the 28-nation bloc should be excluded from U.S. President Donald Trump’s new steel and aluminum tariffs, which enter force this week.

EU Trade Commissioner Cecilia Malmstrom said Monday that “the EU should be excluded as a whole” and that she would convey this message to U.S. representatives in talks in Washington on Tuesday.

Malmstrom said the EU is willing to address the problem of steel overproduction, which she says is the real cause of pain for the U.S. and European industries.

Trump is imposing tariffs of 25 percent on imported steel and 10 percent on aluminum, but is temporarily exempting Canada and Mexico.

The EU has drawn up a list of “rebalancing” duties to slap on U.S. products if it is not exempted.

U.S. ties with Mexico and Canada touch the daily lives of more Americans than ties with any other two countries in the world. Trade, border connections, tourism, family ties and mutual security concerns link us closely, but we are endangering those links and our wellbeing by a contentious modernization of the North American Free Trade Agreement (NAFTA). 

Now is the time to forge as much agreement as possible before elections in Mexico (July presidential and congressional elections) and the U.S. (November congressional elections) close the political space for agreement.

The best outcome would be to conclude an agreement, but given the amount of work left to do, that may not be possible. If the three countries are able to agree conceptually on big-ticket items, however, that would add momentum, allow technical modernization talks to continue and reduce uncertainty for our economy. 

The continuing discussions on the difficult issue of “rules of origin” for automobiles at the eighth negotiating round in April are very important. We need a full court press for progress. This will not be easy, but pulling out of NAFTA or leaving it weakened would badly harm U.S. businesses, farmers and workers and set the stage for a contentious relationship with Mexico’s new government. 

What is at stake?

• $1.24 trillion in annual trade — more than U.S. trades with the EU and 1.9 times more than with China;
• nearly 14 million jobs;
• cross-continental production networks that provide lower costs to U.S. consumers and allow U.S. companies to compete more effectively with China and others;
• close cooperation on intercepting terrorists or bad actors before they reach the U.S.;
• an agreed U.S.-Mexico strategy for fighting drug trafficking;
• U.S.-Mexican cooperation on Central American and third country migration; and
• North American energy cooperation that puts energy security within our grasp.

Competing with China, supporting U.S. workers and growing the economy

It is important to underscore that the “big game” for the U.S. is out-competing a rising China and the other exporting powers. Our two neighbors provide the skills, investment and market specialization to do that more effectively. 

We need to take other steps in order to become more competitive with China, including supporting U.S. workers with much better workforce development and adjustment programs. It will be much harder to compete well without a revitalized NAFTA, however.

A recent study, for example, finds that enhancing economic integrationacross the U.S.-Mexico border can add 700,000 to 1.4 million new jobs on the U.S. side of the border and $69-$140 billion just in U.S. border state economies.

Tremendous costs to ending NAFTA

Serious studies document the potential economic costs of ending NAFTA. Estimates include 250,000-1.2 million U.S. jobs lost and millions more in Mexico and Canada. Projections suggest GDP declines up to $120 billionwith lost exports and costlier imports. Stock markets would likely experience turmoil. 

The U.S. auto industry would be hard hit, as would farmers who have Mexico and Canada as two of their top markets, with over $40 billion in annual sales. Farmers are already seeing the potential effects, as buyers in Mexico purchased up to 900-percent more in agricultural products from Brazil than from the U.S. over the last year.

This is why farm state governors and senators are urging the White House to preserve NAFTA. U.S. consumers would have to pay more for goods now produced in North America’s value chains.

Homeland security partners

Mexico and Canada have been watching our backs. Since 9/11, the U.S. has significantly deepened homeland security cooperation with both neighbors. The three governments share, develop and act on intelligence about threats to the U.S. much more than in the past.

Canada invested heavily in border infrastructure and homeland security after 9/11, gradually building the capacity, programs and willingness to cooperate with the U.S. well beyond the border against potential threats.

Mexico similarly now works more closely than ever before with the Department of Homeland Security and others, sharing information to identify and intercept potentially dangerous actors. Significant new security cooperation agreements are in the works. Recognizing this, 10 former top U.S. military commanders just wrote President Trumpsupporting a NAFTA agreement.

Cooperation can continue to deepen around a modern NAFTA or it can wither among embittered attitudes and public criticisms. Already in Mexicoand Canada there have been sizable drops in favorable views of the U.S.

In 2017, 65 percent of Mexicans expressed unfavorable views of the U.S. The danger with Mexico is that we move back to the narrative before NAFTA, when Mexico and the United States were called “distant neighbors.” 

Breakthroughs needed now 

To move rapidly toward agreement, all three parties must show flexibility. The United States has to be willing to work constructively around the hardline positions it has taken on such issues as rules of origins for autos, a sunset clause for the agreement, dispute settlement mechanisms and government procurement.

Canada and Mexico need to be creative in addressing underlying U.S. concerns. Mexico should accept a strong treaty chapter on labor rights. Canada needs to be flexible, including on support for its dairy industry. All three need to grapple with the new U.S. steel and aluminum tariffs.

The U.S. put these in the mix apparently to gain leverage, but they make it harder politically for either neighbor to show movement. 

In addition to the big-ticket items, much other work remains on less controversial issues, which leads some to predict a long negotiation ahead. The key is to make as much progress as possible this spring. Agreement on big items can add momentum, allow work to continue through the U.S. and Mexican political seasons and promote economic growth in all three economies. 

Progress requires that the U.S. put aside a zero-sum calculus. That perspective does not make for a good long-term relationship with neighbors. We have the opportunity to make the 21st century, the “North American century” by forging a good NAFTA 2.0. The alternative path leaves the field to adversaries and competitors. Let’s drive ahead for a stronger North America.

Canadian Prime Minister Justin Trudeau said he’s willing to accelerate Nafta talks to get ahead of U.S. and Mexico election pressures if needed, striking an upbeat tone on the fate of the trade pact.

MEXICO CITY (Reuters) – Negotiators trying to rework the NAFTA trade deal on Thursday were hit by the prospect of conflict over U.S. steel tariffs that could complicate carmaking in North America, one of the most sensitive issues at the talks.

U.S. President Donald Trump said he would impose the tariffs beginning next week, raising the risk of exacerbating tensions at negotiations already facing serious challenges.

Officials were unable to say immediately whether the tariffs would include imports from Canada and Mexico, the other two partners in the 24-year-old North American Free Trade Agreement.

The lack of clarity created uncertainty as some countries might be exempt or taxed at a lower rate, analysts said. Automakers and other users of the metals are also worried about retaliatory tariffs that might affect their finished products.

For months, the United States, Canada and Mexico have been mired in disagreement over a U.S. demand to require a greater portion of North American auto parts and components under NAFTA, which Trump has threatened to ditch if it is not recast to his liking.

Moises Kalach, head of the international negotiating arm of Mexico’s CCE business lobby, said Trump’s call for a 25 percent tariff on imported steel appeared intended to increase U.S. content in industrial goods but would have unintended consequences.

“Who is the priority here? Workers? Consumers? Somebody will end up paying for this,” Kalach told Reuters on the sidelines of the latest NAFTA talks in Mexico City.“What’s going to happen to the competitiveness of North America?”

Canada is the largest exporter of steel by far to the United States, and Trump’s proposed tariff would raise the cost of building vehicles, experts said.

“This would be very bad news for the auto industry,” said one person close to the negotiations.

Canada’s chief negotiator, Steve Verheul, said his team was“keeping an eye on what’s going on outside” when asked how the talks were progressing late on Thursday.

“It’s a bit of a distraction,” he added, without elaborating.

Although it differs by company, for their vehicles made in North America, Fiat Chrysler (FCHA.MI), Ford Motor Co (F.N) and General Motors Co (GM.N) source the vast majority of their steel from North America, according to the auto industry.

GM said in a statement on Thursday that 90 percent of the steel in its U.S.-built vehicles came from U.S. suppliers.

Talks on the issue during the seventh round were suspended this week when the U.S. negotiator overseeing auto rules of origin, Jason Bernstein, unexpectedly returned to Washington for consultations with industry.

Officials have made little progress on the most contentious files since the talks started in August, and the talks look set to drag on well beyond March, when negotiators had hoped to finish.

Under NAFTA, 62.5 percent of the net cost of a passenger car or light truck must originate in the NAFTA region to avoid tariffs. Trump wants the threshold raised to 85 percent and is also seeking to ensure that half the total content is U.S.-made.

The auto industry has opposed those demands, arguing it would disrupt supply chains and raise costs.

Negotiators have struggled to advance on the auto proposal since it was submitted in October. Automakers are evaluating ideas put forward by Canada last month to include newer technology in the calculation of a vehicle’s value.

The current round of negotiations is set to end on Monday, when Mexican Economy Minster Ildefonso Guajardo, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland are scheduled to meet in the Mexican capital.

Separately, Mexico’s chief NAFTA negotiator, Kenneth Smith, said on Twitter the three sides had completed talks on good regulatory practices.

Sources close to the talks said negotiators had also paved the way for closing the telecommunications portion of the trade deal this weekend, as the United States had dropped a proposal that Mexico opposed.

Canada’s Verheul noted that the three sides were close to completing the section relating to technical barriers to trade but needed more time on the environment, two of the areas that some officials say are close to being concluded.

Tentative plans for Mexican President Enrique Peña Nieto to make his first visit to the White House to meet with President Trump were scuttled this week after a testy call between the two leaders ended in an impasse over Trump’s promised border wall, according to U.S. and Mexican officials.

Peña Nieto was eyeing an official trip to Washington this month or in March, but both countries agreed to call off the plan after Trump would not agree to publicly affirm Mexico’s position that it would not fund construction of a border wall that the Mexican people widely consider offensive, said the officials, who spoke on the condition of anonymity to discuss a confidential conversation.

Speaking by phone on Tuesday, Peña Nieto and Trump devoted a considerable portion of their roughly 50 minute conversation to the wall, and neither man would compromise his position.

One Mexican official said Trump “lost his temper.” But U.S. officials described him instead as being frustrated and exasperated, saying Trump believed it was unreasonable for Peña Nieto to expect him to back off his crowd-pleasing campaign promise of forcing Mexico to pay for the wall.

Both accounts confirm it was Peña Nieto’s desire to avoid public embarrassment — and Trump’s unwillingness to provide that assurance — that proved to be the dealbreaker.

A physically slight man, Peña Nieto has been loath to put himself in an environment in which the more imposing Trump could play the bully. Peña Nieto’s style is exceedingly formal, and he is averse to verbal combat, making his carefully scripted public events the opposite of Trump’s often freewheeling appearances.

With Mexico heading into a July presidential election, any action by Peña Nieto that could be seen as kowtowing to Trump or buckling under U.S. pressure risks damaging the prospects for his Institutional Revolutionary Party.

The two presidents’ public posturing over the wall — Trump demands that Mexico pay for it; Peña Nieto insists that it will not — has harmed their personal relationship and jeopardized the alliance between their neighboring countries.

“The problem is that President Trump has painted himself, President Peña Nieto and the bilateral relationship into a corner,” said Arturo Sarukhan, a former Mexican ambassador to the United States. “Even from the get-go, the idea of Mexico paying for the wall was never going to fly. His relationship with Mexico isn’t strategically driven. It’s not even business; it’s personal, driven by motivations and triggers, and that’s a huge problem. It could end up with the U.S. asking itself, ‘Who lost Mexico?’ ”

Still, negotiations between their respective administrations continue apace on the North American Free Trade Agreement and other issues. And both governments have strived to portray their ties as strong and the exchanges between their leaders as smooth.

“We enjoy a great relationship with Mexico and the two administrations have been working for a year to deepen our cooperation across a range of issues including security, immigration, trade and economics,” Michael Anton, the top spokesman for Trump’s National Security Council, said in a statement.

Mexican Foreign Secretary Luis Videgaray called the U.S.-Mexico relationship closer under Trump than in previous administrations.

“I think in many ways the relationship today is more fluid,” Videgaray said earlier this month in Mexico City alongside Secretary of State Rex Tillerson. “It’s closer than it was with previous administrations, which might be surprising to some people, but that’s a fact of life.”

Traditionally, U.S. presidents have prioritized visits with their Mexican counterparts soon after taking office, considering the close ties between the neighboring countries.

But in January 2017, just days into Trump’s presidency, Peña Nieto called off a planned trip to meet Trump in Washington amid an escalating war of words between the two leaders over Trump’s border wall proposal.

In a Jan. 28, 2017, phone call, a transcript of which was published last year by The Washington Post, Trump suggested to Peña Nieto that they both try to gloss over their respective wall positions by saying “we will work it out” whenever asked whether Mexico would pay for the wall.

“The fact is, we are both in a little bit of a political bind because I have to have Mexico pay for the wall,” Trump told Peña Nieto. “I have to. I have been talking about it for a two-year period. . . . If you are going to say that Mexico is not going to pay for the wall, then I do not want to meet with you guys anymore because I cannot live with that.”

Since that call, Trump has not visited Mexico City and Peña Nieto has not been to Washington, although the two presidents have spoken by phone and met in person in July at the Group of 20 summit in Germany. The two also met in summer 2016, when Trump traveled to Mexico City as a candidate.

Earlier this month, a delegation of Mexican officials led by Videgaray met at the White House with senior adviser Jared Kushner — the president’s son-in-law, who is charged among other things with managing the U.S.-Mexico relationship — national security adviser H.R. McMaster and other Trump administration officials to work out the parameters for a Peña Nieto visit, officials said.

The Mexican officials left the Feb. 14 meeting believing they had an agreement with the U.S. side that Trump would not embarrass Peña Nieto by bringing up his desire for Mexico to fund the wall — a proposition Peña Nieto’s government considers humiliating.

One Mexican official describing his country’s position said, “You cannot talk about the bloody wall.” This official said Videgaray left Washington believing Trump would not broach the wall during Peña Nieto’s visit.

Trump and Peña Nieto made plans to speak by phone Feb. 20, and, assuming the call went well, their staffs would finalize an itinerary for the Mexican president’s White House visit.

But the call did not go smoothly, according to officials from both governments. Trump said he would not be bound by any such agreement and could not commit himself to not talking about the wall.

“That was a dealbreaker for us,” the Mexican official said, adding that Peña Nieto and his administration were concerned in particular about a reporter asking a question about funding for the wall at a news conference and Trump answering it.

Instead of announcing a date for a meeting in Washington, the statements issued by both governments summarizing the call were vague and said only that they had discussed their bilateral agenda on trade, security and migration issues. The statements also said the two presidents exchanged condolences for the high school gun massacre in Parkland, Fla., and the military helicopter accident in Jamiltepec, Oaxaca.

Homeland Security Secretary Kirstjen Nielsen, whose department is responsible for border issues, has canceled an upcoming visit to Mexico. A Department of Homeland Security official denied Saturday that Nielsen’s trip was scratched because of Trump and Peña Nieto’s disagreement, saying the decision to “postpone” her Mexico trip was made a week before the two presidents spoke.

U.S. officials said Trump and Peña Nieto agreed to have their staffs continue talking and try to reach an agreement about the border wall and other issues. A few hours after the two presidents spoke, officials said, Kushner called Peña Nieto to help smooth things over.

U.S. officials said they anticipate that Peña Nieto may try again to visit Washington, perhaps in the spring, and the Mexican official suggested that the two presidents may get together in April at the Summit of the Americas in Lima, Peru.

“Build the wall!” was a signature slogan of Trump’s campaign and has continued to be one through his presidency, even though Congress has not yet fully funded its construction. At his rallies, Trump would cry out, “Who’s going to pay for the wall?” His crowds would shout their answer back: “Mexico!”

Speaking Friday at the Conservative Political Action Conference in Maryland, Trump told his fans, “Don’t worry, you’re getting the wall,” adding that whenever he hears someone suggest that he does not really want to build a wall, “the wall gets 10 feet higher.”

Trump’s statements are considered offensive and outright racist by many Mexicans, who accuse the U.S. president of using their country as a punching bag to motivate his most fervent supporters.

In private, Mexican officials bristle at Trump’s claims that their government is passively allowing drugs and Central American migrants to pass through en route to the United States.

The number of Central Americans detained and turned back by Mexican authorities has at times exceeded the number caught by U.S. border agents, but enforcement by the Peña Nieto government appears to have waned in recent years.

Still, there is an understanding in Mexico that Trump is playing to his national interests, according to Larry Rubin, a businessman who for years has been a leader among U.S. Republicans on Mexico.

“There’s a better understanding of where President Trump is coming from and what his objective is and what his style is,” Rubin said. “Like in any negotiations, there is always posturing or issues that countries don’t agree with. But overall they have so many similarities.”

going to say that Mexico is not going to pay for the wall, then I do not want to meet with you guys anymore because I cannot live with that.”

Since that call, Trump has not visited Mexico City and Peña Nieto has not been to Washington, although the two presidents have spoken by phone and met in person in July at the Group of 20 summit in Germany. The two also met in summer 2016, when Trump traveled to Mexico City as a candidate.

Negotiators from the United States, Mexico and Canada open a new round of talks tomorrow on overhauling the North American Free Trade Agreement, with the Mexican hosts already warning of turbulence.Mexican Economy Minister Ildefonso Guajardo said the renegotiation of the 24-year-old trade deal is entering a critical phase as the three countries head to their seventh round of talks, scheduled to run through March 5.”It’s going to be a difficult meeting, because the more you advance in the negotiations and wrap up work on the constructive issues… what you’re left with are the highly complex issues,” Guajardo told journalists.”That’s why, as of this round, there won’t be any more easy rounds.”After the last round of talks, in Montreal, US Trade Representative Robert Lighthizer said the three sides were making progress, but “very slowly.”The uncertainty looming over the deal is only increasing as the clock ticks on.Mexico, which sends some 80 percent of its exports to the United States, is gearing up for elections on July 1.The presidential frontrunner, the fiery leftist Andres Manuel Lopez Obrador, has sent mixed signals on NAFTA.

At one point, he said he would start the negotiations over and “make Donald Trump see reason” — though his campaign has sought to strike a more moderate tone.Washington has also sent mixed signals since Trump triggered the renegotiation of what he has described as the worst trade deal in history.While his message that NAFTA costs American jobs has played well with his base, the US business sector and many big players in his own Republican party are opposed to sweeping changes.Trump told The Wall Street Journal last month he would be “a little bit flexible” on his threat to withdraw from NAFTA because he understood the Mexican elections were complicating the negotiations.A series of thorny issues will be on the table in Mexico City.One is rules of origin for the auto sector — the amount of a car’s content that must be produced in the region for it to qualify for duty-free status.The United States wants to increase the North American content requirement from 62.5 percent to 85 percent, and add a new requirement for a minimum of 50 percent US-made content.Mexico, Canada and the automakers all reject that proposal.At the last round of talks, Canada made a counter-proposal that would accept the new content requirement but change the way “content” is counted, including intellectual property and new technology in the calculation.Lighthizer bluntly rejected the idea.Guajardo has said Mexico is working on a compromise solution.However, the head of Mexico’s automobile manufacturers’ association, Eduardo Solis, played down expectations of a Mexican-led breakthrough.”The Mexican auto industry has no particular stance in this round. We aren’t proposing anything different than what we have already said, which is that the rules of origin in the original NAFTA should be maintained,” he told Mexican newspaper Reforma.Still, analysts are generally optimistic the deal will survive.”We still think the most likely scenario is a successful renegotiation, due to the fact that the agreement is positive for all three economies and the supply chains are tightly linked,” Santander bank said in a note.