LONDON (Reuters) - S&P Global warned on Friday that it could downgrade Mexico’s BBB+ credit rating if there was a “retreat” from the NAFTA trade pact that it shares with the United States and Canada.
A retreat wouldn’t necessarily mean a complete scrapping of NAFTA but it would mean changes that lessen its benefits, one of S&P’s top sovereign analysts, Joydeep Mukherji, said.
“A prolonged fall in the GDP growth rate resulting from a retreat from NAFTA would weaken government revenues, potentially resulting in higher fiscal deficits and a rising burden of government debt.”
“We could lower our rating on Mexico as a result.”
Mukherji said S&P’s current expectation was that the three governments would eventually resolve their differences in a manner that does not undermine NAFTA’s role or materially damage trade and capital flows between their countries.
Reporting by Marc Jones, Editing by Kit Rees