U.S.-Mexico trade talks could address labor, energy

Wed Nov 14, 2012 3:17pm EST

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* Says TPP pact will bind together 'thinking axis'

By Doug Palmer

WASHINGTON, Nov 14 (Reuters) - The United States and Mexico could soon tackle controversial areas, such as energy policy and cross-border movement of workers, not included in the 1992 North American Free Trade Agreement (NAFTA), Mexico's ambassador to the United States said on Wednesday.

"There were many things that were left off the table because ... they were politically undoable at the time," Ambassador Arturo Sarukhan said at the Inter-American Dialogue, a foreign policy think tank.

But Mexico and Canada's entry into U.S.-led talks on a regional free trade agreement in the Asia-Pacific gives the three NAFTA partners an opportunity to revisit the landmark trade deal.

The United States pushed in the NAFTA talks for reforms to open up Mexico's energy sector "and we said 'no can do,'" Sarukhan said.

Similarly, Mexico wanted changes to make easier for workers to cross the border to take jobs in the United States and "the U.S. said 'no can do,'" he said.

Now Mexico's incoming government under President-elect Enrique Pena Nieto is expected to send a wide-ranging energy reform bill to Congress in the first half of next year.

And a "window of opportunity" exists for the United States to pass comprehensive immigration reform in 2013-2014 following President Barack Obama's re-election, Sarukhan said.

In December, Mexico and Canada will join the United States and eight other countries in talks on the free trade pact known as the Trans-Pacific Partnership (TPP).

The United States, Australia, New Zealand, Chile, Peru, Singapore, Vietnam, Malaysia and Brunei agreed this year to let Mexico and Canada into the negotiations, which Sarukhan said could reach a final deal by late 2013.

Sarukhan said NAFTA had helped the United States, Canada and Mexico become more competitive internationally, but acknowledged it was unpopular in parts of the United States where many workers believe it shipped jobs to Mexico.

"If we were to renegotiate NAFTA, reopen it, it would be like throwing a spanner in the works," Sarukhan said. "TPP allows us to upgrade NAFTA through the back door."

A TPP deal would further enhance North American regional integration, boosting exports for all three countries in markets around the world, he said.

There are also geopolitical aspects to the TPP, at a time when countries in the Western Hemisphere are divided over whether to forge deeper ties with the United States or try to move further away, Sarukhan said.

"The beauty about TPP is that it binds what I would say (is) ... the 'thinking axis' of the hemisphere," Sarukhan said, referring to countries such as the United States, Mexico, Canada, Peru and Chile that he said have embraced free trade.

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