Trump suggests Canada has been sidelined from latest NAFTA negotiations

Roman Schwartz
August 19, 2018

For four straight weeks, US trade czar Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo have held bilateral negotiations on the North American Free Trade Agreement, while Canada has been absent from the bargaining table.

During the cabinet meeting, Lighthizer told the room he's hoping for a NAFTA breakthrough with Mexico in the coming days.

One of the major risks to the world economy is escalating trade disputes, the board of directors of Mexico's Central Bank said on Thursday. Trump told Lighthizer he was in no rush for a resolution over the pact and to walk away from talks if need be.

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. Guajardo indicated the two sides have made progress and that they will meet again next week to continue their talks for a fourth straight week.

Trump, Lighthizer and Agriculture Secretary Sonny Perdue have publicly criticized Canada as uncooperative on USA proposals such as opening its dairy market to US exports. Mexico's new president, Andrés Manuel Lopez Obrador, was elected in July and takes the oath of office December 1.

But both Mexico and the USA have strong incentives to push through a deal quickly.

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Guajardo has stressed that the most hard issues had been left to the end, including the United States demand that NAFTA be approved every five years, a provision known as a sunset clause.

USA and Mexican negotiators have been working to reach a NAFTA cars deal that would allow Canada to rejoin talks and move toward resolving the toughest issues that affect all three nations. 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. The Trump administration had excluded the countries from global tariffs on the imports after concluding that the use of foreign-made steel and aluminum made the USA dependent on imports and posed an economic threat to domestic steel and aluminum manufacturers.

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.

Trade negotiators have sounded optimistic in recent weeks. The key issues the US 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.

Guajardo said the teams had not yet touched the issue of a USA proposed sunset clause that would kill Nafta after five years if it is not renegotiated again.

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