F Ford Motor Company

By Anthony Harrup 

MEXICO CITY -- Mexican President Enrique Peña Nieto on Wednesday named his former finance minister to head the Foreign Relations Ministry as Mexico prepares for what promises to be a complex relationship with the incoming administration of President-elect Donald Trump.

Luis Videgaray, who played a key role in bringing about Mr. Trump's visit to Mexico in late August, resigned as finance minister the following week. He didn't give a reason for his departure, although it was widely attributed to the uproar caused by the visit of the then Republican candidate.

During the campaign, Mr. Trump said he would either renegotiate the North American Free Trade Agreement -- which joins the U.S., Mexico and Canada -- with better terms for the U.S., or pull out of the pact.

He also said he would build a wall along the U.S.-Mexican border to keep migrants out and make Mexico pay for it, and expel unauthorized immigrants from the U.S.

Now, with Mr. Trump just weeks away from taking office, Mr. Videgaray will be in charge of Mexico's foreign policy and the relationship with its top trading partner.

"The instruction to Mr. Videgaray is to accelerate dialogue and contacts so that from the first day of the new [U.S.] administration, the groundwork can be set for a constructive working relationship," Mr. Peña Nieto said.

A discouraging sign for bilateral relations came Tuesday when Ford Motor Co. said it was canceling a planned $1.6 billion investment in a new assembly plant in Mexico, and instead will invest $700 million in a new plant in Michigan.

The decision sent the Mexican peso to new lows against the U.S. dollar, as it raised fears that the Trump government will follow through with more protectionist measures that could hurt Mexico's export-oriented manufacturing sector.

The currency was trading in Mexico City at 21.3715 to the dollar mid-session Wednesday, after closing Tuesday at 21.11.

Mexico sends around 80% of its exports to the U.S. and receives about half of its foreign direct investment from north of the border.

Mr. Trump had taken to Twitter to praise Mr. Videgaray the day after the latter's September resignation as finance minister.

"Mexico has lost a brilliant finance minister and wonderful man who I know is highly respected by President Peña Nieto," he said. "With Luis, Mexico and the United States would have made wonderful deals together - where both Mexico and the US would have benefitted."

Write to Anthony Harrup at anthony.harrup@wsj.com<mailto:anthony.harrup@wsj.com>

(END) Dow Jones Newswires

January 04, 2017 14:24 ET (19:24 GMT)

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