October 3, 2018 |
More than a year after NAFTA negotiations got underway, the only accomplishment was uncertainty. But when the Trump administration announced the US and Mexico had reached a preliminary bilateral deal without Canada it appeared to ease investor concerns in Mexico -- at least for now.
“Investments into Mexico were suffering,” says Martin Castellano, head of Latin America Research at the Institute of International Finance. “Uncertainty took a toll on investment decisions.”
When Mexico’s economy contracted 0.2% in 2018’s second quarter, the central bank released its analysis that the weakness was worse than expected, but that a deal with the United States would help disperse the ambiguity.
As political overtones began impacting trade, Mexico and the US found common ground for their deal negotiations.