Trump Hints at Details; Mexico Still Baffled by Farm Claim

Telegram från Bloomberg / Omni Ekonomi
08 juni 2019, 23.13

(Bloomberg) -- President Donald Trump hinted at additional measures between the U.S. and Mexico, a day after he vowed that Mexico would soon make “large” agricultural purchases from the U.S. as part of a deal on border security and illegal immigration that allowed Mexico to avoid U.S. tariffs.

“Some things not mentioned in yesterday’s press release, one in particular, were agreed on. That will be announced at the appropriate time,” Trump said Sunday in a series of four tweets about Mexico, the media and other matters.

Three Mexican officials said Saturday they were not aware of any side accord in the works, and that agricultural trade hadn’t been discussed during three days of negotiations in Washington that culminated in a joint communique late Friday.

Mexico’s ambassador to the U.S. predicted on Sunday that trade in agricultural goods “could increase dramatically” now that tariffs aren’t going ahead and if the USMCA, the trilateral trade pact with the U.S., Mexico and Canada designed to replace NAFTA, is ratified -- but didn’t cite a specific deal with Washington on farm purchases.

On Saturday Trump told his 61 million Twitter followers in an all-caps message that Mexico had agreed to “immediately begin buying large quantities of agricultural product from our great patriot farmers” following the border security deal. He retweeted the message overnight.

The State Department communique issued late Friday -- entitled the U.S.-Mexico Joint Declaration -- also made no mention of agricultural trade as part of the agreement.

The State Department didn’t respond to an inquiry made through its press department. The White House declined to comment or offer proof to back up Trump’s tweet. The Mexican foreign ministry’s press office declined to comment.

President Andres Manuel Lopez Obrador said at a rally in Tijuana near the U.S. border that Mexico should celebrate the “important deal” with the U.S. that removed the threat of tariffs as it was preparing to retaliate. He also didn’t mention agriculture in a speech attended by leading political figures in the country.

Mexican Ambassador

If tariffs “had been applied it would’ve caused significant damage to both economies,” he said. “We were being put in a very difficult and uncomfortable position to have to apply the same measures that were going to be placed on Mexican exports.”

Earlier in the week, the Mexican president said that “a mixing of migration with commercial matters” was “unfortunate.”

Martha Barcena, the Mexican ambassador to the U.S., said trade in agricultural goods “will increase dramatically” in the next few months under the right conditions.

“Is trade on agricultural products going to grow? Yes, it is going to grow, and it is going to grow without tariffs and with USMCA ratification,” Barcena said on CBS’s “Face the Nation.”

In a tweet, Barcena said she didn’t contradict Trump. “I just explained that with no tariffs and the USMCA ratification the trade in agricultural products will increase dramatically. Mexico is already a big buyer of USA agricultural products and this trend will continue,” she said.

Mexico is second only to Canada in the size of its agricultural purchases from the U.S., including corn, soybeans, pork and dairy products. It had given no indication of attempting to find alternative suppliers during the standoff over Trump’s proposed steep tariffs on Mexican goods.

The U.S. Department of Agriculture in May forecast U.S. agricultural exports to Mexico in the current fiscal year at $19.7 billion, about 14% of total U.S. farm exports and up from $18.8 billion in fiscal 2018. Canada was forecast to buy $21.5 billion in agricultural products.

Increasing Mexico’s purchases from the U.S. beyond current levels wasn’t discussed during the Washington talks, said the three people with knowledge of the deliberations who weren’t authorized to speak publicly.

Mexico has no state-owned agricultural conglomerate to buy food products or handle distribution, or a government program that could buy farm equipment for delivery to producers.

Trump earlier on Friday suggested the talks were covering trade in agriculture, and not just border security issues as members of his administration had said -- and that the State Department communique listed. If a deal was made, Trump said at the time, “they will begin purchasing Farm & Agricultural products at very high levels.”

Trump on Saturday was fund-raising on the back of the Mexican agreement. His campaign sent out a “donate now” email that read in part, “Art of the Deal! Mexico has agreed to help END ILLEGAL IMMIGRATION. Promises Made. Promises Kept.”

Farm states, among the strongest of Trump’s supporters, have been hit hard by the president’s trade war against China, and the threat of additional action against Mexico had some farm-state senators up in arms. The president is expected to travel to the heartland to hold a private fund-raiser in West Des Moines on Tuesday.

(Updates with Mexican ambassador from fourth paragraph.)

--With assistance from Shannon Pettypiece, Shawn Donnan and Mark Niquette.

To contact the reporters on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net;Eric Martin in Mexico City at emartin21@bloomberg.net

To contact the editors responsible for this story: James Ludden at jludden@bloomberg.net, Ros Krasny, Steve Geimann

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