20180820-法国巴黎银行-Mexico__NAFTA_–_Far_away,_so_close__10页_415kb

Summary of "Mexico: NAFTA – Far away, so close!"

Core Content

This document provides an analysis of the ongoing NAFTA renegotiations, focusing on the situation between Mexico and the United States, with Canada's role and concerns also discussed. It outlines the progress made, the unresolved issues, and the strategic implications of the negotiations.

Main Points

Progress in Negotiations

• The NAFTA renegotiations have reached a one-year mark with signs of a potential breakthrough.
• Talks on agricultural rules and auto sector rules of origin have made significant progress.
• Around 10 out of 30 chapters have been concluded, and nine others are close to completion, leaving approximately 40% of the deal unresolved.

Unresolved Issues

• Chapter 11 (investor protections) and Chapter 19 (dispute settlement) remain contentious.
• Labour issues are a key concern, especially for Canada and Trump's supporters.
• Agricultural barriers continue to be a major point of contention, particularly between Canada and the U.S.
• Social issues, including indigenous rights and environmental standards, are also raised by Canada.

Bilateral Strategy

• The recent negotiations involved only the U.S. and Mexico, excluding Canada.
• This strategy aims to reduce Canadian resistance to certain provisions, particularly those related to agriculture.
• However, it may weaken Mexico's bargaining power and complicate the approval process in all three countries.

Political Context

• Jesus Seade, appointed as Mexico's chief negotiator by President AMLO, has indicated a more flexible approach to labour law clauses than his predecessor.
• AMLO has promised to redefine the approach to NAFTA negotiations, emphasizing new elements and a focus on fairness and sustainability.

Key Information

Infochart 1: NAFTA Roadblocks and Progress

• Highlights the remaining unresolved chapters and their significance.
• Emphasizes the toughness of the remaining issues.

Infochart 2: Obstacles to a Short-Term Deal

• Lists the remaining chapters that are likely to be the most difficult to resolve.
• Notes the legal and regulatory challenges associated with fast-track approvals and the potential for the U.S. Trade Partnership Agreement (TPA) to complicate the process.

Legal and Regulatory Disclaimers

• The document is a marketing communication and not investment research.
• It is non-independent research and may be subject to conflicts of interest.
• BNPP may have financial interests in the entities mentioned, which could influence the analysis.
• The document is intended for professional clients and eligible counterparties and may not be suitable for retail investors.

Conclusion

• A final agreement is expected to be positive, with NAFTA remaining in place.
• However, a deal before 31 August seems unlikely.
• The negotiations are likely to continue into late 2018 or even 2019.
• The bilateral approach may hinder progress due to the complexity and divergent interests among the three countries.

Additional Notes

• The document includes important disclosures regarding options, ETFs, and convertible securities, highlighting the risks involved.
• It also provides regulatory information for various jurisdictions, including the UK, France, Germany, Belgium, and Ireland, to ensure compliance with local laws and standards.

References

• ProMexico, Mexico's Economy Ministry, BNP Paribas' own assessment
• EIEconomista, USTR, Mexico's Economy Minister