National Post (National Edition)
No breakthrough in sight at latest NAFTA talks
Strategist doubts deal can be reached this year
MEXICO CITY • The latest round of NAFTA talks is nearing its conclusion without any major breakthroughs or agreements on even the least-contentious topics, officials familiar with the negotiations say, fuelling doubts among observers that a deal can be reached this year.
U.S. Trade Representative Robert Lighthizer is scheduled to speak publicly alongside Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Minister Chrystia Freeland on Tuesday to conclude the second round of talks toward a new North American Free Trade Agreement. Their joint appearance will cap a five-day session in Mexico City.
While negotiators have now initially addressed all major topics and made some progress, they have yet to agree on any major contentious issue and the three countries are far from a deal on any individual NAFTA chapter, the officials said, speaking on condition of anonymity to discuss private talks. On some topics, discussion has been only verbal with no specific text proposals submitted, they said.
The talks came after U.S. President Donald Trump threatened outright withdrawal from the agreement. In some ways, slow progress is normal — trade negotiations typically begin with the easiest issues in order to build consensus, agreement and momentum before progressing to resolving the most controversial ones. But the nations have been seeking an unusually quick timeline for NAFTA, and two government officials expressed doubt that a deal could be reached by the countries’ target date of December, based on the current pace of progress. That sentiment is shared by many observers and stakeholders who say the U.S. has been slow in detailing its actual demands.
“They can’t possibly finish. The Americans haven’t started negotiating yet,” said Peter Clark, a trade strategist and former Canadian official. Jerry Dias, a Canadian labour leader, said he’d “be shocked if it gets done before Christmas.”
Clark said the earliest possible date for a deal is February or March, and even then it would likely be an agreement-in-principle that wouldn’t be finalized until after Mexican and U.S. elections. “It’s not really a negotiation. What you have is a president who says he’s been robbed for years,” Clark said. “He wants to break a contract without any penalty.”
Lighthizer, Guajardo and Freeland are scheduled to hold private bilateral and trilateral meetings Tuesday.
Over the first four days in Mexico City, government officials had said progress was being made on subjects such as the digital economy, a topic on which the three countries largely already agree. Controversial subjects like rules-of-origin and dispute settlement were discussed Monday by negotiators, according to a schedule obtained by Bloomberg.
David Wiens, a farmer and vice-president of the Dairy Farmers of Canada, said he’s been surprised by the lack of written and firm policy proposals put forward by the U.S. government. That makes him believe it’s “a bit unrealistic” to get a deal by December.
“What we’re hearing on the ground here is the Americans have still not posted all the texts for the different chapters,” Wiens said.
With some progress on less controversial issues, positions are still being outlined on more difficult ones, one official said. All sides continue to define goals and positions to work through in future rounds of talks, the official said. The next round is expected in Canada later this month.
The outlook isn’t entirely gloomy. One official described a two-track process — a political one dominated by Trump’s threats, and a decidedly more constructive and technocratic track with negotiators plodding forward in search of agreement.
Complex trade agreements such as the Trans Pacific Partnership — which Trump backed out of and which was effectively a NAFTA modernization — typically take years to negotiate. The fast pace for NAFTA is spurred by American midterm elections and a Mexican presidential election in 2018, both of which are driving hopes of an agreement by the end of this year. Canadian officials are said to also favour a quick deal.