Peña Nieto calls off Trump meeting over border wall dispute

What amounts to a Twitter war between Mexican President Enrique Peña Nieto and US President Donald Trump erupted Thursday, resulting in the Mexican leader cancelling a high profile visit set for January 31 and throwing sensitive trade negotiations into disarray.

Mexican foreign relations minister Luis Videgaray and economy minister Ildefonso Guajardo have been meeting with close Trump advisors and cabinet officials Wednesday and Thursday and had been expected to give Peña Nieto their report to set the stage for the presidential face-to-face.

While also touching on border security and immigration, US-Mexico trade policy and the fate of Nafta are at the heart of the discussions, with nearly US$600bn in bilateral trade at stake, as Trump - less than a week in office - rapidly advances his efforts to renegotiate or scrap the 24-year-old trade agreement.

In a video address posted on Twitter Wednesday evening, Peña Nieto responded to Trump's earlier announcement of an executive order to move forward with the construction of a multi-billion dollar border wall and unrelenting insistence that Mexico will foot the bill, despite repeated statements from the Mexican government in recent months that it would not pay under any circumstances.

MEXICAN SENATORS CALL ON PRESIDENT TO CANCEL TRIP

That post was largely in response to calls from Mexican senators Wednesday for the president to cancel his trip to salvage Mexico's dignity in the face of Trump's characterization of the nation as a source of murderers and participants in the theft of US prosperity.

Peña Nieto has seen his already low approval rating plummet in Mexico, first for his reception of Trump in September on a campaign stop, resulting in a PR nightmare that cost then-finance minister Luis Videgaray his job, only to return to lead the reframing of US-Mexico relations with Trump.

The president's approval rating has now fallen to just 12% and with a national election coming in 2018 and political opponents backed by fierce anti-Trump sentiment in Mexico, he has been left with little room to negotiate.

Trump answered the post early Thursday with a tweet of his own, saying, "The US has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers of jobs and companies lost. If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting."

Within a matter of hours, the Mexican president's office responded in kind, posting, "This morning we have informed the White house that I will not attend the work meeting scheduled for next Tuesday with [Trump]."

Speaking shortly after at a gathering of Republican leadership, Trump doubled-down on his anti-immigration, anti-NAFTA rhetoric.

"The hour of justice for the American worker has arrived," said the leader in the televised event.

"Most illegal immigration is coming from our southern border, I've said many times the American people will not pay for the wall, and I've made that clear to the government of Mexico."

Trump then went on to attack NAFTA. According to recent report from the US Chamber of Commerce, NAFTA has instead created 5mn net US jobs and quadrupled trade within the Canada-Mexico-US bloc since its 1994 inception.

" NAFTA has been a terrible deal, a total disaster for the United States from its inception, costing us as much as US$60bn a year with Mexico alone in trade deficits ... not to mention millions of jobs and thousands and thousands of factories and plants closing down all over our country," said Trump.

According to US official data, the US had a US$58.8bn deficit in trade in goods with Mexico in 2016, while gross bilateral trade amounted to US$532bn, some US$236bn of which were US exports to Mexico.

Trump went on to say US taxpayers had spent "trillions of dollars" "to pay the cost of illegal immigration" without going into any specifics.

"Much of it is then sent back ... and often times because they don't respect us, the other countries will not accept the criminals that we send back to them that are illegally in our country," added Trump, conflating remittances and criminals.

A recent mission statement on Mexico's foreign ministry website places the human treatment of migrants in the US as the ministry's number-one priority, the next being the "well ordered" repatriation of its citizens within pre-established guidelines in the event they are deported.

Trump said of criminals illegally residing in the US: "We're not going to have them any longer."

"To that end, the president of Mexico and myself have agreed to cancel our planned meeting scheduled for next week. Unless Mexico is going to treat the United States fairly - with respect - such a meeting would be fruitless, and I want to go a different route. We have no choice," said the new US leader.

Trump finally alluded to a proposal from leading Republican lawmaker Paul Ryan that would establish a new 20% sales tax on imported goods that could bring in US$10-12bn in taxes levied against those in the US purchasing Mexican goods and fund Trump's wall-construction and deportation efforts.

"We're working on a tax reform bill that will reduce our trade deficits, increase American exports, and will generate revenue from Mexico that will pay for the wall if we decide to go that route".

The row is the first public spat between the US and Mexico in recent memory, and while the Trump- Peña Nieto tête-à-tête may have to wait, trade negotiations have already begun and will be vital in forging a path forward, regardless of the outcome.