March 2, 2017 / 7:49 PM / 6 months ago

UPDATE 2-Mexico economy minister to meet with Ford, GM in Detroit

(Adds details on last week's meeting, context)

MEXICO CITY, March 2 (Reuters) - Mexico's economy minister will travel to Detroit on Friday to meet with executives from automakers Ford Motor Co and General Motors Co, keeping a frenetic pace of meetings to deter President Donald Trump from punishing Mexican exports.

Economy Minister Ildefonso Guajardo will also meet with auto parts makers that have operations in Detroit and Mexico, the ministry said. He will discuss the state of U.S.-Mexico trade and the future of the North American Free Trade Agreement (NAFTA).

Trump has vowed to exit NAFTA, the 1994 trade accord that also includes Canada, if he cannot get better terms for the United States. He has also drawn up plans to build a wall on the U.S. southern border and tax Mexican-made goods heading north to pay for it.

Wary of Trump's unpredictability, Mexico is not counting on talks with the White House to save it from a possible trade war. Instead, it hopes to build support among companies and U.S. states that most rely on business south of the border to pressure the president not to resort to drastic measures.

On Tuesday, Foreign Minister Luis Videgaray said Mexico would only stay in NAFTA if it suited the nation and he rejected the imposition of any tariffs or quotas. The countries have yet to start formal negotiations.

"Thanks to NAFTA, Mexico and Michigan have built a dynamic trade relationship," the ministry said, noting that Mexico was Michigan's second biggest trade partner with more than $12 billion in exports to Mexico last year.

The United States sent its top diplomat Rex Tillerson and Department of Homeland Security Secretary John Kelly to Mexico City last week to tend to ties badly bruised by Trump's threats about NAFTA, the border wall and Mexican immigrants.

Their efforts were set back when Trump described deportations as "a military operation," forcing Kelly to make a public clarification.

One person familiar with the events said news of Trump's comments came just as Kelly and Tillerson were meeting with their counterparts, underscoring what Mexican officials see as the dangers of negotiating with the U.S. administration.

To calm the waters, the U.S. officials decided to add the clarification to Kelly's press statement after the meetings, the source said.

Reporting by Veronica Gomez and Alexandra Alper; Writing by Michael O'Boyle; Editing by Frank Jack Daniel and Cynthia Osterman

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