US, Mexico, Close to Reaching NAFTA Deal

Darnell Taylor
August 19, 2018

For four straight weeks, US trade czar Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo have held bilateral NAFTA talks while Canada has been absent from the bargaining table.

US Trade Rep Lighthizer says that he is "hopeful" for a breakthrough on NAFTA with the next few days, and Pres. Trump shoots back "OK if there is no breakthrough".

Raymond Bachand, an ex-Quebec finance minister, said "there is no worry whatsoever" the current one-on-one talks between the United States and Mexico will end in a trade deal signed without Canada.

Regardless of whether one agrees with Trump's negotiating tactics, Orava said, if the administration can land a good agreement on a new NAFTA, "it will validate their approach to USA trade policy is effective and generating results and worthwhile".

Reaching an agreement with Mexico would mark a breakthrough for the administration after a year of roller-coaster talks and tension with its longtime North American trading partners.

Multilateral trade negotiations typically include bilateral talks between nations, but the administration's strategy to close a deal first with Mexico - without parallel discussions with Canadian officials - is unusual and could backfire.

Bilateral NAFTA negotiations between the two countries have been building momentum in recent weeks, while Canada has yet to return to the table this summer.

Trump administration officials want to pry open Canada's restricted dairy market and do away with an existing NAFTA provision that allows Canada to challenge USA anti-dumping claims through an independent panel.

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Tensions between Canada and the USA also rose June 1 when the US ended an exemption for Canada, Mexico and the European Union from 25 percent steel and 10 percent aluminum tariffs imposed for national security reasons under Section 232 of the Trade Expansion Act of 1962.

Canada, meanwhile, has shown less urgency to complete a revision of the 24-year-old pact, but is expected to return to the bargaining table once the US and Mexico settle their differences.

He added that they would resume talks on Friday, but the sunset provision would be among the "very last items" to be dealt with in the talks.

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.

"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.

Mexican officials on Wednesday said that Mexico and the United States may not meet their goal to finish talks by the end of August. 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.

U.S. President Donald Trump is seen here speaking at a recent rally.

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