Mexican trade team to meet with Trump officials

With hundreds of billions of dollars in annual trade hanging in the balance, Mexican foreign minister Luis Videgaray and economy minister Ildefonso Guajardo will meet with US officials in high-level talks in Washington, DC in the coming week.

While meetings with top advisors have been confirmed in an official statement, the talks, set for January 25 and 26, will most likely include meetings Steven Mnuchin at the treasury department and Rex Tillerson at the state department, pending their senate confirmation in the coming days.

The meetings will also include President Donald Trump's chief of staff Reince Priebus, chief advisors Stephen Bannon and Jared Kushner, national economy advisor Gary Cohn, national trade advisor Peter Navarro and national security advisor Michael Flynn.

The talks will focus on trade issues and will likely include discussion of a current US proposal that would place a 20% tax on all imports and remove taxes on all exports, a manoeuver that could potentially cost Mexico many billions of dollars every year in lost GDP and investment.

The talks will be the first official interaction between Mexican President Enrique Peña Nieto's cabinet and the incoming Trump administration.

In recent weeks, Trump has reiterated his commitment to positioning trade negotiations - particularly regarding Mexico and Nafta as 'Day 1' priorities - in this case, hosting the Mexican delegation only five days into his term.

For Mexico, the stakes could not be higher both politically and economically.

With trade between the US and Mexico reaching US$583.6bn in 2015, the US is far and away its largest trading partner, being the recipient of some 83% of its exports in 2016.

Mexico is already facing a number of deep, intransigent economic problems tied to public debt and a limping state-run oil industry, as the nation increasingly relies on foreign direct investment.

Those issues have been more apparent this month amid public outrage over fuel price hikes and inflation, amid economic jolts tied to Trump's rhetoric, including the US carmaker Ford's scrapping of plans for a US$1.6bn assembly plant in Mexico earlier this month.

Those issues have driven the peso to depreciate by nearly 6% in January and undermined Peña Nieto's approval rating to an abysmal 12%, with presidential elections on the horizon in 2018.