U.S., Mexico in ‘final hours’ of talks on NAFTA side deal
Agreement could come today as focus turns to when Ottawa will return to the table
The U.S. and Mexico are poised to resolve their bilateral NAFTA differences as soon as Monday, creating an opening for Canada to rejoin talks covering $1.2 trillion (U.S.) in annual trade.
Significant breakthroughs between Mexico and the U.S. came during the past several days on the contentious issues of automobiles and energy, according to three people familiar with the process who asked not to be named as they discussed private talks.
The three countries have been negotiating for a year to overhaul the 24-yearold accord at the insistence of U.S. President Donald Trump. The terms of any deal struck by U.S. Trade Representative Robert Lighthizer would need the president’s final approval. Companies operating across North America have worried that some of Trump’s demands could hurt the region’s economy.
Talks continued Sunday at the U.S. Trade Representative’s offices in Washington. Arriving at the meeting, Mexican Economy Minister Ildefonso Guajardo was upbeat.
“The story of these types of things is always defined in the final minute, and I would say that we’re practically into the final hours of this negotiation,” Guajardo told reporters. “We’ll do everything possible to try to land a deal.”
Guajardo predicted that the U.S. and Mexico would need at least a week of work to resolve issues with Canada whenever it rejoins talks.
Even with brightening prospects, Ottawa has remained absent from summertime discussions and a timeline for Canada’s return to the table has yet to be mapped out.
The federal government insists it hasn’t been frozen out of the talks, and Foreign Affairs Minister Chrystia Freeland said she’s been in regular contact with both Lighthizer and Guajardo.
Canadian officials have argued the bilateral period has been necessary for the U.S. and Mexico to sort out tough issues such as rules of origin for automobiles.
But trade experts say Canada’s absence is — at least in part — a tactic by the White House to divide and conquer as it applies extra pressure on Ottawa to accept what could be a less palatable deal.
Peter Clark, a veteran Ottawabased trade strategist, said the U.S. is letting Canada cool its heels in what he calls a unique approach to negotiations.
“It’s not unusual to have bilateral sessions, but not to this extent,” said Clark, who considers a Lighthizer a good tactician.
“It’s an Ambassador Bob special.”
Derek Burney, a former Canadian ambassador to Washington, agrees that keeping Canada away from the table in recent weeks is part of the U.S. strategy.
“Crude and rude to be sure. But not necessarily damaging,” Burney wrote in a brief email, adding that Canadian officials “will have to wait and see, while holding our ground without flinching.”
There were signs this weekend of progress on some of the most complicated issues. Jesus Seade, the NAFTA representative for Mexican president- elect Andres Manuel Lopez Obrador, predicted on Saturday that the nations will agree on a lighter version of a so-called “sunset clause,” an automatic expiration of the trade deal after five years — a key U.S. demand.
Guajardo has said repeatedly he expects the issue to be one of the last resolved once Canada returns to the talks. He’s proposed regular NAFTA evaluations without the threat of any sudden death to the agreement.
The sunset clause is likely to see some type of compromise, said a U.S. official who asked not to be named. The person added that work on bilateral issues with Mexico is almost entirely complete.
It remains unclear how U.S. and Mexican negotiators would frame any announcement about the completion of work on their bilateral issues. Guajardo has signalled that the nation won’t declare victory on NAFTA until Canada also signs on.
White House press secretary Sarah Huckabee Sanders said Sunday morning that the administration has “no announcements or anything finalized at this time.”
Lighthizer and Jared Kushner, Trump’s son-in-law and adviser, declined to comment on Sunday afternoon as they left the U.S. Trade Representative’s offices.
Even when Canada is asked to rejoin talks, its negotiating team may have to begin without Freeland. She’s on a diplomatic visit to Europe until Thursday, with stops in Germany, Ukraine and France.
Clark said there are expectations Freeland will return to Washington on Friday. From there, he thinks Lighthizer might hold separate bilateral talks with both Canada and Mexico before restarting trilat- eral discussions that have been on hold since the spring.
“It’s not a negotiating style. He’s just trying to get everything he can out of each side and he prefers to do that one on one,” Clark said.
The U.S. and Mexico in recent weeks had largely focused on the thorny issue of car manufacturing, as the Trump administration pushes for a deal aimed at boosting factory jobs in the U.S. Washington has proposed tightening regional content requirements for car production and having a certain percentage of a car manufactured by higher-paid workers.
While a U.S. proposal to increase tariffs on cars imported from Mexico that don’t meet new content rules has long been a sticking point, that issue appeared to have been resolved by Thursday.