Trade

Mexico to Wilbur Ross: We're not a dumping ground for China to get around NAFTA rules

Key Points
  • Mexico's Economy Secretary Ildefonso Guajardo says the country is not a dumping ground for Chinese imports.
  • Guajardo is upbeat about the new talks to renegotiate NAFTA.
Mexico is not a backdoor for Chinese imports in US: Ildefonso Guajardo
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Mexico is not a backdoor for Chinese imports in US: Ildefonso Guajardo

Mexican Economy Secretary Ildefonso Guajardo told CNBC on Tuesday an accusation that the country is being used as a backdoor for Chinese imports into the United States "is not a right one."

Earlier this year, Commerce Secretary Wilbur Ross accused Mexico of taking advantage of NAFTA rules, saying, "Mexico's trade deficit with China is approximately equal to their trade surplus to us. It's not an accident."

"The rules of origin in NAFTA need some tightening," Ross added. "Rules of origin are what let material outside of NAFTA to come in and benefit from all the taxes and tariff reductions within NAFTA."

In an appearance on "Squawk Box," Guajardo said Ross is incorrect, and that no additional actions need to be taken.

"Forty percent of our exports to the U.S. are cars. And when you look at cars, the Chinese content in any type of cars being traded with American is less than 3 percent," he said. "When you analyze the U.S. deficit vis-a-vis China and the Mexican deficit vis-a-vis China, basically we're importing the same things and those are things that have not been produced in North America for the last 25 years."

Guajardo spoke ahead of a series of meetings in Washington on Tuesday between the U.S. and Mexican companies to discuss bilateral cooperation and trade. Guajardo is also expected to see Ross.

Last month, President Donald Trump formally launched his effort to renegotiate NAFTA with Canada and Mexico to try to win better terms for U.S. workers. Guajardo was upbeat about the new talks.

"We feel very positive that there are good planning grounds to get a renewed NAFTA, an improved NAFTA, " he said, adding that the country is prepared for alternatives.