Since restarting last month, the talks have focused on settling differences between Mexico and the United States that go to the heart of US President Donald Trump’s complaint that Nafta has hollowed out US manufacturing to Mexico’s benefit. Trump has threatened to dump the 24-year-old accord if it is not reworked to the advantage of the United States. He hopes to reduce the US trade deficit with lower-cost Mexico and claw back jobs, particularly in the automotive industry. Although progress has been made on the automotive question in recent weeks, other issues, including a US proposal that could kill Nafta after five years, remain unresolved.
Guajardo’s comments were echoed by Jesus Seade, designated chief negotiator of Mexican President-elect Andres Manuel Lopez Obrador, who said the two sides were making “good progress” and that talks could conclude “in the coming hours.” Canada has been waiting for the Mexican and US teams to reach common ground on autos before rejoining the negotiations. US and Mexican officials say they will push for a deal on reworking auto industry rules that could open the door for Canada to return to negotiations soon. Guajardo said the talks would seek to resolve the key issues so that Canada could rejoin the talks.
How quickly Canada returns to the table would depend on the progress made in Wednesday’s talks, he said. A Canadian government source said on Tuesday there was nothing to report yet on Canada’s return. Talks to rework Nafta, which underpins the bulk of foreign trade in North America, have ground on for more than a year. Discussions stalled ahead of the July 1 Mexican election as negotiators failed to make a decisive breakthrough. Aside from autos, the three sides have yet to agree on future dispute resolution mechanisms, while Mexico and Canada also oppose a US demand to introduce a “sunset clause” that would force a renegotiation of Nafta every five years.
Mexico and Canada fear a sunset clause could be a major hindrance on long-term investment. Entering talks, Seade said the teams were making “good progress” and “coming to the end” of their discussions. He expected bilateral issues to be resolved by early next week. A Canadian government source said there was “nothing to report for the moment” on Canada’s return to the talks.Trump’s son-in-law and adviser Jared Kushner also attended the talks with Seade on Tuesday. Kushner has been a regular participant in the Nafta discussions.
Talks to rework Nafta, which underpins the bulk of foreign trade in North America, have ground on for more than a year. Though Nafta is a trilateral deal, a Mexican source said there are issues that are really “bilateral” between Mexico and the United States. In rules of origin for autos, “Mexico clearly had to look for flexibilities because Canada was relatively comfortable with the original (US) proposal,” the source said.
Sources and photo-credits: Bloomberg, Gulf Times