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Fruit pickers harvest strawberries at a farm in San Quintín in Baja California state, Mexico, in 2015. One berry farmer sent strawberries to China for the first time last May in a move emblematic of an effort by businesses across Mexico to push into new markets amid trade uncertainty with the United States.Edgard Garrido

Last May, farmer Mario Andrade Cárdenas sent his first shipment of strawberries and raspberries to China. In October, Jorge Contreras Fornelli tracked down a Mexican supplier to send flakeboard to his sofa factory in Juárez, replacing raw materials he currently imports from the United States. In December, a cargo ship carrying 30,000 tonnes of wheat from Argentina docked in the Mexican port of Veracruz. And last month Mexican President Enrique Peña Nieto flew 6,700 kilometres south, on his first visit to the landlocked Republic of Paraguay, to sign a new economic co-operation pact.

A year into Donald Trump's U.S. presidency – and the accompanying uncertainty about the future of the North American free-trade agreement – Mexico's government and its private sector have begun to engage seriously with the idea of an economy that redirects its focus from the north.

"We've kept going with business as usual, but we're changing our mentality and our mindset," said Mr. Andrade, a past president of the National Association of Berry Exporters.

"Eighty per cent of the total agricultural crop of Mexico goes to Canada and the U.S., and you don't change that in a day," he said, adding that there is no denying how dependent he and other agribusiness owners – and the 300,000 Mexicans who work in the US$1.8-billion berry industry – are on NAFTA.

"But we opened our eyes and re-evaluated" after Mr. Trump began to talk of "tearing up" NAFTA, Mr. Andrade said, and it wasn't hard to find new markets. "We started to look at China and the Arab countries. Of course we feel vulnerable – they're moving the floor underneath us. But now we feel, if NAFTA ends, it won't be the end of the world. "

The berry farmers' push into new markets is emblematic of an effort by manufacturers and producers across Mexico, but the reality is that they are small steps – and late ones, says Fernando González-Rojas, a former World Trade Organization dispute settlement lawyer who now teaches trade law at the Monterrey Institute of Technology and Higher Education in Mexico City.

"Was Mexico able to design a Plan B since the shock of Trump being elected? The truth is, not really," he said. "When you're part of a club such as NAFTA, you invest so much in it that you cannot change course so rapidly. But Mexican industry started looking at other trade partners, specifically South America. Mexico today is looking at Brazil and Argentina in a whole new way."

Mexico also pushed for the revival of the Trans-Pacific Partnership (now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership), one forged without the United States – something that's ultimately good for Mexican industry – and has accelerated talks with the European Union to broaden existing trade ties.

Luis de la Calle, who was part of the Mexican negotiating team that drew up the original NAFTA terms 24 years ago and who now advises the government, says new export opportunities – such as Mr. Andrade's berries – are useful, but the real key to leverage with the Trump administration is for Mexico to find new sources of imports, because that threatens agricultural producers in the U.S. South, a Republican region whose support Mr. Trump increasingly understands he needs.

"Diversification of your exports doesn't give you negotiating strength – imports is what matters," he said. "That first shipment of wheat from Argentina just came in, and it's not much wheat in the overall scheme, but the signalling is critical: That ship sends people to the White House wearing 'I Support NAFTA' buttons."

Mexico is the largest importer of U.S. corn, buying US$2.6-billion annually, but has already sent delegations to Brazil and Argentina to find new suppliers.

Mr. Contreras, who chairs the board of Sofamaster, the second-largest furniture firm in Mexico, has been seeking to end the company's reliance on a U.S. supplier because of the uncertainty of Mr. Trump's plans. His factory is in a maquiladora zone in Ciudad Juárez, where duty-free raw materials are trucked in and finished products are shuttled back across the border into Texas. For more than 20 years he has relied on a U.S.-based maker of flakeboard, whose quality he trusts, he said. But if the United States were to withdraw from NAFTA, the product would face a 20-per-cent tariff under the WTO rules that would come into force – and he would replace it with the local one.

"That's our Plan B," he said.

But the company's research suggests flakeboard is the only raw material that would face duties, and the firm could continue to export to the United States without tariffs. Mr. Contreras says he wouldn't be thrilled with making the shift, but he's ready if he has to – and ultimately, he noted wryly, his firm's situation demonstrates why pulling out of NAFTA would be bad for plenty of U.S. consumers and workers, something Mr. Trump does not seem to grasp.

The U.S. President said as recently as three weeks ago that he had not made up his mind about "tearing up" NAFTA. Such statements have weakened the peso and drove down levels of both foreign and domestic investment in Mexico in 2017.

That has the Peña government keen to send new signals. On Jan. 11, Mexico signed the ICSID Convention, administered by the World Bank, which allows for the adjudication of disputes in international investment.

Essentially, it's a way of replacing Chapter 11 of NAFTA, the clause that sets out rules for transnational investment, and provides guarantees for investors in Mexico.

"Now, even if we leave NAFTA, we're still a trusted recipient of foreign investment," Prof. González-Rojas said. The larger message, he added, is "Mexico is open for trade – and it's going to stay open."

At the conclusion of the sixth round of NAFTA talks in Montreal in late January, all three delegations expressed official cautious optimism, although there was little to show from the actual negotiations. In Mexico, optimism tends to stem from the simple fact there are talks at all: The longer the pact survives, most business owners and officials say, the less likely it is that the United States will simply walk away.

One factor that has little to do with Mr. Trump is the Mexican presidential election, to be held on July 1. None of the candidates has had much to say about the trade agreement of late, although the clear front-runner, left-leaning populist Andrés Manuel López Obrador, has in the past suggested that the deal should be renegotiated to Mexico's advantage. Now, no candidate wants to be seen to share the anti-NAFTA views of Mr. Trump, who is wildly unpopular in Mexico, and since the agreement is broadly viewed as being beneficial to Mexico's economy, none can overtly advocate leaving it.

"If López Obrador wins, the strategic value of NAFTA grows exponentially – it becomes key to keeping Mexico from 'becoming Venezuela,' as the U.S. sees it," Mr. de la Calle said. "And if Trump pulls out before June, it maximizes the chances of López Obrador winning, so he won't do it."

Mr. Andrade, the berry farmer, said his exports to Asia and the Middle East remain a small part of the business – but one he's keen to grow. "It's the biggest market in the world, with new and different options," he said, suggesting that being forced to look beyond North America can only be good for his industry.

Meanwhile, in Juárez, Mr. Contreras said many factory owners are reluctant to invest much in their firms while the Trump uncertainty endures, but in fact, business is just fine. "Our exports are growing," he said. "And our company is going to keep moving on."

The prime minister says Canada, Mexico and the U.S. are all winning when it comes to NAFTA. Justin Trudeau made the remarks in a speech to local and state legislators near Los Angeles on Friday

The Canadian Press

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