US-Mexico trade deal will be 'fair to both parties,' says Michael Milken

• "Mexico is extremely important to the United States, the United States to Mexico. And therefore all the words, all the rhetoric for the last year and a half, will be put to bed," Michael Milken told CNBC.
• The U.S. and Mexico struck a trade deal last month that paved the way to replace the North American Free Trade Agreement (NAFTA), the current agreement between the two nations and Canada.

Mexico and the United States will reach an agreement that "will be fair to both parties," Michael Milken, chairman of think tank the Milken Institute, said on Thursday.

Milken, who was speaking to CNBC's Oriel Morrison at the 2018 Milken Institute Asia Summit in Singapore, said: "Mexico is extremely important to the United States, the United States to Mexico. And therefore, all the words, all the rhetoric for the last year and a half, will be put to bed."

The U.S. and Mexico struck a trade deal last month that paved the way to replace North American Free Trade Agreement (NAFTA), the current agreement between the two nations and Canada.

However, the White House would need to ask Congress separately to approve a bilateral track, and once an agreement is reached, it would need to notify Congress again of its intention to send the deal to Capitol Hill for a vote. That process would take 180 days at a minimum.

Negotiations on a deal between the U.S and Canada are still ongoing, and Mexico has said it is keen on Canada joining the agreement to make it trilateral. But it would be ready to pursue a bilateral agreement with the U.S. if talks between Ottawa and Washington do not work out, Mexican Economy Minister Ildefonso Guajardo said on Wednesday.

U.S. Customs and Border Protection officer directs trucks entering the United States from Mexico through the Otay Mesa Port of Entry in San Diego, California.

David Maung | Bloomberg | Getty Images

Milken added: "The new president of Mexico that's coming in was talking about ... closing minerals and energy markets to development. He's now recently announced he's going to continue these programs ... So I think we need to separate what people are saying and what actually happens."

Mexican President-elect Andres Manuel Lopez Obrador, a longtime skeptic of current President Pena Nieto's energy reforms, had spoken of plans to suspend energy auctions and review contracts already awarded.

Milken, who was known as the "junk bond king" in the 1980s, and had pioneered the market for high-yield bonds, also told CNBC he expects the supply chains for Asian companies to expand to become global ones.

"Many years ago, you have countries in Asia that were the primary manufacturers of clothes and et cetera, but their costs increased dramatically, and the people actually moved to other countries and opened plants."

"I will not be surprised to see many businesses and entrepreneurs that are here from China to have factories in other countries in the world in the future, so that they have a global supply chain instead of a supply chain just coming from China."

— CNBC's Kayla Tausche and Reuters contributed to this report.