SAN LUIS POTOSI, Mexico, March 8 The Mexican
state that the Ford Motor Co abandoned after Donald
Trump's election is courting Asian manufacturers to make up for
the loss, but clearing up uncertainty over the future of NAFTA
will be key to attracting new investment, its governor said.
In January when Ford canceled a $1.6 billion plant in San
Luis Potosi it was a major victory for President Trump's
campaign to force U.S. industry to bring jobs home, but it also
sparked fears of a slump in foreign investment in Mexico.
Trump has threatened to ditch the North American Free Trade
Agreement (NAFTA) between the United States, Mexico and Canada
if he cannot rework it to his advantage, but Mexico's government
has also said it could walk away from an unfavorable deal.
Juan Manuel Carreras, governor of the central state, said
until Mexico and the United States establish the basis for
future trade, drawing in major investors would be challenging.
"Once we have clarity on NAFTA, I'm sure Mexico and San Luis
Potosi will have plenty of opportunities to attract new
investment," Carreras said in an interview.
Mexican and U.S. officials have said NAFTA negotiations
could begin from around mid-year onwards.
San Luis Potosi's economy minister Gustavo Puente Orozco,
traveled to China and Singapore in February after Ford pulled
out. He heralded some new investments from Asian suppliers, but
it was not substantial enough to compensate for the loss.
Puente told Reuters 56 Japanese companies do business in San
Luis Potosi, up from just three eight years ago. Still, nearly
half the foreign direct investment in the state over the past 16
years have come from the United States, he said.
Suppliers in San Luis Potosi have grown cautious since Ford
withdrew, and estimates on the potential cost to the state run
into the hundreds of millions of dollars..
Ford attributed its decision to declining demand for small
cars, though Trump lashed out at Ford when it unveiled the
investment last year, and he took credit for its change of plan.
Mexico accounts for one-fifth of all vehicle production in
North America and has attracted more than $24 billion in
investment from the industry since 2010, according to the
Michigan-based Automotive Research Center.
The country exports most of its car production to the United
States, but Trump wants auto makers to invest more at home, and
has threatened to impose high tariffs on cars made in Mexico.
(Reporting by Roberto Aguilar; Writing by Dan Freed; Editing by