NAFTA renegotiation talks will bleed into next year amid 'challenges'

Prime Minister Justin Trudeau is greeted by U.S. President Donald Trump as he arrives at the White House in Washington D.C. on Wednesday
Time running out for Nafta talks, set to be extended: Sources
Author

18 October, 2017

Officials from the three countries had hoped to conclude the negotiations by year's end but now expect the talks to continue into 2018.

Lighthizer said he thought by now the sides would've agreed to issues including digital trade, telecommunications and anticorruption, and there's no indication of changes that would result in a reduction of the US trade deficit. Nafta now lets manufacturers - such as garment makers - create cross-border supply chains in which parts of a final product are sourced from different countries before being assembled in a final location. Trump, however, has frequently blamed NAFTA for the decline in American manufacturing and flight of jobs and production to Mexico.

The U.S. proposed raising that threshold to 85%, according to the Canadian government source.

The first key disagreement is over "rules of origin".

Discussions remained tense as the US government insists on several big changes to the 23-year-old deal that could hurt Canada and Mexico. There have been reports that some USA negotiators themselves are reluctant to argue demands even they don't agree with.

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Mexico and Canada have repeatedly and publicly denounced US demands as the fourth round of talks concludes.

Talks to revise the North American Free Trade Agreement will go into next year amid clashes over how best to change the deal, top officials said Tuesday. "Because of its complex supply chains that cross both borders, the auto industry would suffer the most, with autos accounting for almost 40% of exports to Canada and 22% of exports to Mexico". They have also put forward a clause, called "twilight" that could put an end to the NAFTA by five years.

Mexican President Enrique Peña Nieto traveled to China last month in part to discuss trade, and met with German Chancellor Angela Merkel in June about significantly broadening an existing trade agreement with the European Union. However, Mexican Economy Secretary Ildefonso Guajardo told CNNMoney in April that such a proposal wouldn't work for him. But leaders from his ruling Institutional Revolutionary Party are anxious that the end of the deal could provoke nationalist sentiment ahead of next year's presidential election, giving an added boost to far-left front-runner Andres Manuel Lopez Obrader.

"This is what negotiations are like", Vanessa Rubio, Mexico's deputy finance minister, said on Saturday.


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