NAFTA talks hit wall as Mexico, Canada push again on U.S. calls for

MEXICO CITY (Reuters) – The US, Mexico and Canada didn’t resolve any main variations in a fifth spherical of talks to transform the NAFTA commerce deal, drawing a swift criticism from the Trump administration on Tuesday that the dearth of progress may doom the method.

Flags are pictured in the course of the fifth spherical of NAFTA talks involving the US, Mexico and Canada, in Mexico Metropolis, Mexico, November 19, 2017. REUTERS/Edgard Garrido

The three nations have vowed to proceed talks on the North American Free Commerce Settlement (NAFTA) via March, however the yawning disagreements on core U.S. calls for are piling strain on negotiators to give you fixes earlier than Mexico’s 2018 presidential marketing campaign begins within the spring.

Mexico and Canada have rejected a U.S. proposal to lift the minimal threshold for autos to 85 p.c North American content material from 62.5 p.c in addition to require half of car content material to come back from the US.

The 2 have additionally resisted a spread of different U.S. calls for, together with a plan to scrap a key dispute decision mechanism and proposed curbs on Mexican and Canadian agriculture.

Minutes after the three nations issued a brief joint assertion underlining advances and vowing to proceed work on concluding negotiations “as quickly as potential,” U.S. Commerce Consultant Robert Lighthizer struck a distinct tone.

“Whereas we’ve got made progress on a few of our efforts to modernize NAFTA, I stay involved concerning the lack of headway,” he stated in an announcement. “So far, we’ve got seen no proof that Canada or Mexico are prepared to significantly have interaction on provisions that may result in a rebalanced settlement. Absent rebalancing, we is not going to attain a passable end result,” Lighthizer added.

Lighthizer and his Mexican and Canadian counterparts stayed away from the talks in Mexico Metropolis, the place the temper was calmer than within the earlier spherical final month in Washington.

Negotiators stated advances had been made in agreeing on of the technical element that types the bedrock of the accord. However time was working out in the event that they need to attain a deal by the top of March.

The negotiating groups are as a consequence of meet once more in Washington in December earlier than a sixth formal spherical of negotiations is scheduled for Montreal, Canada from Jan. 23-28.


A U.S. official stated wording had been agreed upon for anti-corruption, telecommunications, items market entry, sanitary and meals security measures and technical limitations to commerce with areas left for disputed sections.

A NAFTA banner is seen in the course of the fifth spherical of NAFTA talks involving the US, Mexico and Canada, in Mexico Metropolis, Mexico, November 19, 2017. REUTERS/Edgard Garrido

“I believe there’s a variety of gelling occurring, slightly than a variety of closing, so I believe there’s argument that we’re on schedule, that assembly our deadline of an settlement by March is just not out of the query,” the official stated, talking on situation of anonymity as a result of sensitivity of the talks.

U.S. President Donald Trump has threatened to withdraw from NAFTA except he can rework it in favor of the US, arguing that the pact has hollowed out U.S. manufacturing and brought on a commerce deficit of over $60 billion with Mexico.

The U.S. official expressed frustration that Mexico and Canada weren’t partaking in talks on the auto content material proposal and others aimed toward “rebalancing” commerce within the area.

“Should you make a proposal and the opposite aspect doesn’t reply, what’s it you’re doing?,” the official stated.

The U.S. auto proposal is a central plank of Trump’s America First technique to spice up U.S. manufacturing, nevertheless it faces stiff resistance from the auto trade, which worries it can make North American carmakers much less aggressive and costlier.

Mexican and Canadian officers stated they wished the US to clarify how the auto plan may prosper.

“The place is the benefit in making a counterproposal to a requirement that might take us backwards?” stated a Canadian supply.

The U.S. official did notice, nevertheless, that Mexico had put ahead a counterproposal to a U.S. plan to limit entry for Mexican and Canadian companies to U.S. public contract tenders that sought to place U.S. companies in the identical scenario in Mexico.

“I believe Mexico is being useful in utilizing a counterproposal to crystallize their views,” the official stated.

Mexico additionally formally proposed that NAFTA permit for a evaluation of the accord each 5 years, as an alternative of terminating the deal routinely if it isn’t renegotiated, as the US has demanded, three Mexican officers stated.

Taking impact in 1994, NAFTA underpins a lot of the greater than $1 trillion in annual trilateral commerce, and Washington’s threats to stroll away from the pact have spooked markets.

Mexican officers initially expressed hope that chapters comparable to telecoms and e-commerce may very well be closed in the course of the spherical. However chief Mexican negotiator Ken Smith informed reporters that none would wrap up this time.

Reporting by David Lawder and Anthony Esposito; Modifying by Cynthia Osterman; extra reporting by David Ljunggren; Modifying by Grant McCool and Cynthia Osterman

Our Requirements:The Thomson Reuters Trust Principles.

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