US, Mexico near NAFTA agreement

Minnie Murray
August 27, 2018

Canada's top diplomat and chief NAFTA negotiator Chrystia Freeland said earlier this week that Canada would rejoin the discussions once the bilateral issues between Mexico and the USA had been resolved.

"Our relationship with Mexico is getting closer by the hour", the tweet read. "Some really good people within both the new and old government, and all are working closely together". The two countries earlier this month entered a round of bilateral negotiations for modernizing the 2015 trade deal, which President Donald Trump has threatened to pull out of.

U.S. and Mexican negotiators will continue meeting through the weekend to revamp the North American Free Trade Agreement and Canada is set to rejoin the talks as soon as they are called, Mexico's Economy Minister Ildefonso Guajardo said Friday, reports AFP from Washington.

Juan Pablo Castanon, president of the CCE group that comprises some of Mexico's most influential industry associations, said progress by the two countries should be enough to allow Canada to rejoin the talks soon.

The "sunset clause" - an automatic cancellation of all agreements after five years - has been a major demand from the USA administration, but Mexico believes it can agree to a renegotiated version of this.

Trump has softened his tone recently both about the trade accord and about Mexico, a nation that he argues has stolen and done little to stop illegal immigration and drug trafficking to the United States.

In Washington, Guajardo said Wednesday that he hoped to have a solution in "the next couple of hours, or couple of days".

Jesus Seade, who is the incoming Mexican government's chief NAFTa negotiatior, said that the issue had been "ironed out" at the NAFTA talks, but he did not disclose any detail.

The US-Mexico talks for weeks focused on crafting new rules for the automotive industry, which Trump has put at the centre of his drive to rework the 24-year-old deal he says has been a "disaster" for American workers. Some of the toughest issues, like an American demand for greater access to the Canadian dairy market and a clause that could end NAFTA after five years, remain unsettled.

NAFTA negotiators, who began their work one year ago, have missed a series of informal deadlines, from an original goal for a deal by last December to a revised objective for an agreement in the first half of this year.

Seade said the issue of auto sector rules is "basically resolved", although some aspects, including time frames, are still being discussed.

On his way into Saturday's talks in Washington, Mexican Economy Minister Ildefonso Guajardo praised the U.S. president's "optimism", but remained cautious.

However, representatives of US agricultural, manufacturing and other sectors have cautioned the White House that walking away could be a blow for the USA economy.

"It is no longer what the U.S. proposed in any way, it is an approach focused on future evaluation and continuation", he said.

S. talks have been complicated by divisions between the incoming and outgoing Mexican administrations over energy policy.

Trump tweeted on Saturday morning. Any deal that would be signed after Obrador takes office is likely to involve renegotiating certain provisions to reflect the new president's populist mandate.

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