So far, however, that hasn’t been the case. The iShares MSCI Mexico Capped ETF (EWW) has kept pace with the U.S. markets so far this year, as has its Canadian equivalent, EWC. Much of that has to do with the fact that Nafta talks have cooled off as of late, with both sides seemingly seeking mutually beneficial compromises in most cases.
Bloomberg has more details on the latest round of negotiations, which have been much quieter than those in the recent past:
The fifth round of talks, which began in Mexico City on Nov. 15 and wraps up on Tuesday, is the first held without the top trade chiefs from the three countries. That allowed the respective teams to work on the challenge of updating the more mundane facets of the nearly 2,000-page North American Free Trade Agreement, which started in 1994 and is undergoing a major overhaul.
Progress was slow over the weekend. While hundreds of hours of talks are unfolding on issues ranging from car manufacturing to telecommunications, negotiators have punted decisions on the most divisive issues to future rounds. The three countries in October extended the deadline for the talks to March, when negotiations could be complicated by elections in Mexico and later the U.S. midterms.
With Washington’s new tax plan on the table right now, investors shouldn’t expect a resolution to the Nafta issues any time soon. But the worst case scenario seems to have been avoided, and that’s good news for Canada and Mexico moving forward.
The iShares MSCI Mexico Capped ETF (EWW) was unchanged in premarket trading Monday. Year-to-date, EWW has gained 15.55%, versus a 16.42% rise in the benchmark S&P 500 index during the same period.