US, Mexico, Close to Reaching NAFTA Deal

  • US, Mexico, Close to Reaching NAFTA Deal

US, Mexico, Close to Reaching NAFTA Deal

The Trump administration doesn't have the legal authority to sideswipe Canada and sign a bilateral trade deal with Mexico, Quebec's chief NAFTA negotiator said August 13.

U.S-Mexico talks resumed in July, without Canada, after negotiations involving all three members of the $1.2 trillion trade bloc stalled in June.

President Donald Trump replied that Lighthizer should not be in a rush to make a deal and should walk away if no breakthrough occurs.

Departing from morning talks at Lighthizer's offices, Mexican Economy Minister Ildefonso Guajardo suggested there was still work to be done before agreement could be reached.

Trump appeared to feed that belief during a televised cabinet meeting in Washington on Thursday - on the one-year anniversary of the start of NAFTA's renegotiation.

The flags of Canada, Mexico and the USA are seen on a lectern before a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico, March 2018.

United States officials have indicated that if the deal can be agreed by the end of August it would be possible to win congressional approval for the new NAFTA before Mexico's President-elect Andres Manuel Lopez Obrador takes office December 1.

The U.S.is hoping to remove Canada's dairy supply management system as part of the NAFTA talks.

"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". There are several sticking points that include dispute resolution, agriculture issues, intellectual property, government procurement, the proposed inclusion of a five-year sunset clause and the de minimis threshold, which is the maximum value of an item that Canadians can order from a foreign country without paying duties or taxes. Mexico wants to lock in an agreement before its new leftist president takes office, and the White House is keen on achieving a win on trade ahead of the midterm elections. "NAFTA will continue because the power in the U.S. Senate is very strong in commercial decisions, and governors also have a big influence".

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

"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.

Analysts who have been closely monitoring the talks say that US and Mexican trade officials are working out details and that a deal still could unravel.

The U.S. president has argued the deal has facilitated an exodus of manufacturing jobs from the United States to Mexico, but NAFTA's supporters say it has kept the region competitive. But talks bogged down over several US proposals, such as a provision that would allow any one of the three countries to walk away from NAFTA after five years, and a provision to make optional the investor-state dispute settlement process that allows corporations to use private, three-person arbitration panels to seek monetary damages for a country's policies or laws they say affect their bottom line.