Only 2 out of 3 now in Talks — NAFTA Negotiations

Lloyd Doyle
August 19, 2018

Lighthizer made the remarks at White House meeting of President Trump's Cabinet.

Lighthizer was speaking in Washington amidst the latest round of high-level talks between US and Mexican officials to rejig the North American Free Trade Agreement, known as NAFTA, with a deal still elusive a year after the renegotiation began.

Departing from earlier talks at Lighthizer's offices, Mexican Economy Minister Ildefonso Guajardo suggested there was still work to be done before agreement could be reached. If so, the US would then turn to negotiate an agreement with Canada, but some market access differences remain a sticking point when it comes to dairy.

"If the US wanted a bilateral deal - and they don't, they've repeated often they want a trilateral deal - they don't have legal authority". A major change sought by the White House is the manner in which NAFTA calculates the regional content of where a new vehicle or truck is manufactured.

The end of the tariff exclusions strained relationships with Canada, Mexico and the European Union, which responded with retaliatory tariffs on selected US goods.

"And then I hope once we get one with Mexico, that Canada will come along".

At the Senate hearing, it was unclear how far-reaching a preliminary agreement with Mexico could be. That would take the pressure off Lopez Obrador and allow him to focus on other priorities. And by most accounts, that will be tough to do.

Mexico remains "cautiously optimistic", according to Politico, that an agreement can be reached, possibly by the end of this month.

Canada isn't likely to have a major issue on the new auto rules, but is expected to go to the mat on at least two US demands.

After the election, USA and Mexican officials began meeting again without the third member of the pact - Canada - in an effort to tackle bones of contention, including revamped automotive sector rules and a sunset clause that could kill NAFTA after five years.

"Minister Freeland, Ambassador (David) MacNaughton and the Canadian negotiating team are in regular contact with their counterparts and we look forward to continuing these important discussions in the coming weeks", Adam Austen wrote in an email.

The nations are pushing for a deal by the end of this month in order to allow sufficient time for President Donald Trump and his Mexican counterpart, Enrique Pena Nieto, to sign the pact before President-elect Andres Manuel Lopez Obrador takes office December 1.

Mexican officials on Wednesday said that Mexico and the United States may not meet their goal to finish talks by the end of August. No issue has occupied as much time as NAFTA's auto rules.

U.S. President Donald Trump is seen here speaking at a recent rally.

Industry officials said on Thursday that the administration still has not agreed to remove the threat of "Section 232" tariffs on vehicles built at new plants nor specified whether passenger vehicles that do not comply with the rules would face a higher tariff than the current 2.5 percent. The key issues the USA and Mexico are working on include what percentage of auto industry components need to be made in North America to avoid tariffs, and how many cars and trucks need to be made in factories paying higher wages. The hope is that more jobs would stay in the USA and that European and Japanese automakers would source more parts in the avoid the tariffs.

"NAFTA has been a disaster for our country", he said. "It would be political gold going into the midterms", he said.

Other reports by Iphone Fresh

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