NAFTA countries meet in push for deal in 2018

WASHINGTON — The NAFTA countries are making what could be one final push for an agreement this spring, before political deadlines punt the process into 2019. The lead political ministers for Canada, the U.S. and Mexico began meeting Monday for what could be a multi-day round aimed at securing an agreement.

If an agreement doesn’t happen soon, some feel it won’t happen this year at all: Mexico and the U.S. will both be immersed in national election campaigns through most of 2018.

U.S. trade czar Robert Lighthizer has said the window for a deal may only be open for the next one or two weeks.

“I believe if we don’t get it done in the next week or two, then we’re on thin ice about whether it gets done before our (November legislative midterm) election,’’ Lighthizer said a few days ago.

Monday’s meetings started with an early-afternoon encounter between the lead ministers for Mexico and the U.S., in an effort to clear away the big issue separating those two countries: auto parts.

The U.S. is demanding that 40 per cent of every car be produced in a high-wage country, otherwise the car is subject to a tariff. Automakers could meet that threshold with up to 15 percentage points’ worth of credits for spending on research and development. Mexico is expected to make a counter-offer Monday; it has rejected the proposal as damaging to its own industry.

But some analysts say the latest plan wouldn’t be good for any country, or its workers or consumers. Their argument is that because few companies are likely to redesign their production patterns, most will simply pay the tariff of 2.5 per cent on small vehicles and pass the cost onto customers.

Canada’s foreign minister, Chrystia Freeland, was scheduled to meet her U.S. counterpart later in the day.