Mexico says new US trade deal won't block economic relations with other countries - such as China

Mexico's Foreign Minister Luis Videgaray at the Senate building in Mexico City, Mexico, on Oct 5, 2018. PHOTO: REUTERS

MEXICO CITY/SHANGHAI (REUTERS) - Mexico's Foreign Minister Luis Videgaray told his Chinese counterpart in a phone call on Saturday (Oct 13) that Mexico's new trade deal with the United States and Canada will not impede economic relations with other countries, according to a foreign ministry statement.

The pact set to replace the North American Free Trade Agreement (Nafta) outlines that if one of the partners enters a free trade deal with a "non-market" country - such as China - the others can quit in six months and form their own bilateral accord.

The mechanism would support US President Donald Trump's efforts to isolate China economically amid an escalating tariff war between the two economic powerhouses, and give Washington an effective veto on any China trade deal by Canada or Mexico.

Mr Videgaray did not detail whether Mexico would seek such a deal, but said that the new pact, called the US-Mexico-Canada Agreement (USMCA), would not block bilateral accords with countries not included in the deal.

"Videgaray emphasised that none of its conditions constitute an obstacle for bilateral relations or economic exchanges that Mexico, as a sovereign state, maintains with other nations," the official told Chinese Foreign Minister Wang Yi, according to the statement.

A statement released on China's Ministry of Foreign Affairs website on Sunday (Oct 14) said that Mr Wang called China and Mexico "all-round strategic partners", and noted that both had consistently supported, understood and trusted each other on major matters.

"Any bilateral and multilateral free trade agreements should not be directed against third parties, nor restrict other members' legitimate rights and interests, and further, should not be exclusionary," the statement said, quoting Mr Wang.

China and Mexico are both emerging market countries and should uphold multilateralism and the free trade system, the statement said.

US Commerce Secretary Wilbur Ross has called the provision in the deal with Mexico and Canada a "poison pill" that could be replicated.

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