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Donald Trump's protectionist speech against free trade and against Mexico is more bluff than bite, foreign trade analysts said.
Even though the presumptive Republican candidate has said that the North America Free Trade Agreement (NAFTA) is "a disaster", ditching the agreement would affect U.S. companies, weaken U.S. growth and the Congress could block his attempt, Luz María de la Mora from LMM Consulting and Arturo Rangel of the National Transformation Industry Chamber (Canacintra) said.
However, there is one risk scenario: if Donald Trump wins the election before the U.S. Congress ratifies the Trans-Pacific Partnership (TPP), because he could request a renegotiation of the deal, said Luis de la Calle, CEO of the consulting firm CMM Consultores.
If the U.S. government reverses its opening and violates international treaties there could be legal consequences, because he would lose credibility and a trade dispute may emerge, De la Calle explained.
Trump has also threatened to impose a tariff of 35% to the automotive industry, because he believes that firms should invest in America instead of going to Mexico.
The American businessman does not acknowledge cases such as Ford, that has invested more than 10 billion dollars in the last five years to expand its operations in the United States, said Duncan Wood, director of the Mexico Institute at the Wilson Center.
The Republican candidate says Mexico should pay for the trade surplus it has with the United States. However, Juan Pablo Castanón, chairman of the Business Coordination Council (CCE), and Gustavo de Hoyos, chairman of the Mexican Employers' Association (Coparmex), said that 6 million U.S. jobs are linked to exporters from the automotive, auto parts, electrical and electronic parts industries.
This shows that Trump does not acknowledge that free trade represents profits and jobs for the United States, they added.
(With information from Sara Cantera and Carla Martínez)
