NAFTA talks hit wall as Mexico, Canada push back on US demands

NAFTA talks hit wall as Mexico, Canada push back on US demands

NAFTA talks hit wall as Mexico, Canada push back on US demands

The United States, Mexico and Canada failed to resolve any major differences in a fifth round of talks to rework the NAFTA trade deal, drawing a swift complaint from the Trump administration on Nov. 21 that the lack of progress could doom the process. 

The three nations have vowed to continue talks on the North American Free Trade Agreement (NAFTA) through March, but the yawning disagreements on core U.S. demands are piling pressure on negotiators to come up with fixes before Mexico’s 2018 presidential campaign begins in the spring.

Much friction centered on Mexican and Canadian rejection of a U.S. proposal to raise the minimum threshold for autos to 85 percent North American content from 62.5 percent as well as to require half of vehicle content to be from the United States.

The two have also resisted a range of other U.S. demands, including a plan to scrap a key dispute resolution mechanism and proposed curbs on Mexican and Canadian agriculture.

Minutes after the three countries issued a short joint statement underlining advances and vowing to continue work on concluding negotiations “as soon as possible,” U.S. Trade Representative Robert Lighthizer struck a different tone.

“While we have made progress on some of our efforts to modernize NAFTA, I remain concerned about the lack of headway,” he said in a statement.

“Thus far, we have seen no evidence that Canada or Mexico are willing to seriously engage on provisions that will lead to a rebalanced agreement. Absent rebalancing, we will not reach a satisfactory result,” Lighthizer added.

Lighthizer and his Mexican and Canadian counterparts stayed away from the talks in Mexico City, where the mood was calmer than in the previous round last month in Washington.

Mexican Economy Minister Ildefonso Guajardo said that his government was ready to address Lighthizer’s concerns but by boosting commerce in the region, not restricting it.

“We’re prepared to work towards that (rebalancing) goal, provided it doesn’t limit Mexico’s ability to produce and export,” he told reporters in Mexico City on Tuesday evening.

He added that Mexico would make a counterproposal to the U.S. auto content demand once it had understood it.

Negotiators said advances were made in agreeing on of the technical detail that forms the bedrock of the accord. But time is running out if they want to reach a deal by the end of March.

The negotiating teams are due to meet again in Washington in December before a sixth formal round of negotiations is scheduled for Montreal, Canada from Jan. 23-28.