published Mar 23rd 2017, 5:27 pm, by Eric Martin and Erik Schatzker

(Bloomberg) —
Mexico is prepared for the end of the North American Free Trade Agreement if it can’t reach a deal with the U.S. and Canada that’s a win for all three nations, the country’s top diplomat said.

President Enrique Pena Nieto’s administration is committed to ensuring North America remains a tariff-free region and has been clear about setting the limits for what it can accept in a negotiation with the U.S., Foreign Relations Minister Luis Videgaray said Thursday in an interview with Bloomberg TV. The two nations have deep and complex ties, and a strong relationship with Trump adviser and son-in-law Jared Kushner is an asset for Mexico as it works with the U.S., Videgaray said.

Videgaray said that Mexico is open to including a peso stabilization mechanism, alluded to earlier this month by U.S. Commerce Secretary Wilbur Ross, as part of a Nafta update, as well as industries including digital commerce, energy and telecommunications and improved rules of origin. Like central bank Governor Agustin Carstens, Videgaray said he views the nation’s currency as undervalued even after its world-leading rally since Trump’s inauguration. The rebound shows that investors understand the three Nafta partners are committed to working hard to reach a good deal, he said.

“If what is on the table is something that is not good for Mexico, Mexico will step away from Nafta” and rely on the rules of the World Trade Organization, Videgaray said, speaking on the sidelines of Mexico’s annual banking convention in the resort city of Acapulco. “There will be a future without that. The question is ‘Why would you want to do that, if we can have a trade deal that can be much improved to the benefit of the three countries?’”

Mexico felt the initial brunt of Donald Trump’s presidency after the peso tumbled amid threats he’d rework or scrap Nafta and make Mexico pay for a border wall to keep out undocumented immigrants. The currency has since made a comeback after Trump administration officials including Ross and trade adviser Peter Navarro said that the U.S. and Mexico have an opportunity to reach a Nafta deal that can benefit both countries.

Asked about Trump’s “America First” mantra, Videgaray said that while any sovereign nation should be putting itself first, the U.S.-Mexico relationship and Nafta aren’t zero sum games. Videgaray said Nafta should continue to protect investments made in all three countries. While Ross said earlier this month that Nafta talks will probably start in the latter part of 2017 and suggested they could last a year, Videgaray said the White House has been telling him they expect the renegotiation to begin this summer.

Videgaray said Mexico is “very concerned” about the state of democracy in Venezuela, where regional elections have been delayed, the National Assembly’s powers curbed and political opponents of the government jailed. Mexico wants to work with the region to send a strong message about the situation and is drafting a joint statement with other members of the Organization of American States.

–With assistance from Nacha Cattan.To contact the reporters on this story: Eric Martin in Mexico City at emartin21@bloomberg.net ;Erik Schatzker in New York at eschatzker@bloomberg.net To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net Robert Jameson, Philip Sanders
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