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GE backs NAFTA and voices support for Mexico

Mexico's President Enrique Pena Nieto speaks with Jeffrey R. Immelt, Chief Executive of General Electric at Los Pinos presidential residence in Mexico City, in this undated handout photo released to Reuters by the Mexican Presidency on May 12, 2017. Mexico Presidency/Handout via REUTERS

General Electric (GE.N) on Friday praised Mexico as a big part of its future and said the company is “very supportive” of the North American Free Trade Agreement (NAFTA) that U.S President Donald Trump has threatened to ditch.

GE Chief Executive Officer Jeff Immelt said on a visit that Mexico had great potential and was not properly understood. He touted the conglomerate’s Mexican operations and the trade deal binding Mexico, Canada and the United States.

“GE as a company, we’re very supportive of NAFTA,” Immelt told employees at an event to mark the expansion of operations in the northern city of Monterrey. He said the trade accord could be modernized, as Mexico has argued.

Immelt sits on a Trump-appointed manufacturing council that Mexico has targeted for lobbying as Mexico and Canada push U.S. business leaders to defend NAFTA.

The GE boss said trade meant “win-win” opportunities across North America.

“We will continue to work constructively in the context of wanting to see a close relationship between the U.S. and Mexico,” he said, noting that GE’s exports to the rest of the world from Mexico were worth $3 billion.

“We’re optimistic about Mexico, we’re optimistic about what we can do here,” Immelt added, saying Latin America’s no. 2 economy would be a “big part” of GE’s future.

Earlier this month, Immelt urged the Trump administration to avoid protectionist policies, calling on it to level the playing field for U.S. companies with tax reform, revived export financing and improved trade agreements.

Trump touts a “Buy American” policy and has railed against U.S. companies moving operations to Mexico. He has threatened to ditch NAFTA, a lynchpin of the Mexican economy, if he cannot rework it to secure better terms for the United States.

Unlike some U.S. companies, GE has not backed off plans in Mexico, risking broadsides from Trump on Twitter.

Earlier, the Mexican presidency said in a statement that GE had stated an interest in doubling purchases from Mexican suppliers next year. Immelt did not mention this.

Vladimiro de la Mora, CEO for Mexico, said the figure came from an announcement last year and did not mean GE aimed to double purchases between this year and 2018.

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On Thursday, GE said it had won a contract to provide plants producing two new gigawatts of power in Mexico and secured a separate $120 million, multi-year service deal.

De la Mora said GE could not yet reveal details of the 2 GW deal, but it was “likely” the value of the total investment in the power plants would exceed $500 million.

(Reporting by Dave Graham in Monterrey, Additional Reporting by Mexico newsroom in Mexico City; editing by Grant McCool and David Gregorio)