International Banking - Annual Overview
NAFTA REVIEW AND CONSIDERATIONS
Scotiabank is operating in the right markets across the Pacific Alliance and committed to long
term growth
•
Impact on Pacific Alliance
。 No material impact expected on Peru, Chile, or Colombia
。 Mexico is highly exposed to disruptions in NAFTA, but we do not expect any major negative changes in the trading
relationship with the US
• Viewpoint
。 NAFTA came into effect in 1994. Much has changed since then in the global economy. Efforts to 'modernize' elements of
NAFTA in the areas of e-commerce, intellectual property, and professional labour mobility are welcome
。 Mexico has a strong manufacturing industry with 40 bilateral trade agreements with other countries
。 NAFTA has helped Mexico to advance on a number of meaningful structural reforms in sectors that include Energy,
Telecommunications, and Transportation, amongst others, that will support growth
。 Mexico invests heavily in education and produces more engineers each year than Germany
Overall Outlook
。 We do not expect a consensus on a 'renegotiated and modernized' NAFTA by the current deadline of end-March 2018,
nor do we expect NAFTA to be ripped up with an increase in tariff and non-tariff barriers to trade with the US
o Instead, we expect uncertainty over NAFTA to continue through 2018
。 We expect Mexico to continue delivering double-digit loan growth: NAFTA-related uncertainty does not appear to have
dented investment so far
o Mexico 'mainstreet' continuing to perform well and Scotiabank gaining market share in both retail and commercial
activities
Scotiabank® |
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