NAFTA deal in principle possible by deadline: envoy

Canada’s ambassador OTTAWA to the U.S. David MacNaughton called Monday for a swift closure of North American Free Trade Agreement negotiations, saying upcoming elections in Mexico threaten to complicate future talks.

The initial deadline for NAFTA talks was set for the end of 2017, but was later extended to March 31. Observers have warned that stretching beyond that March deadline would cause the negotiations to bump up against the Mexican general election, scheduled for July 1.

“If you go past that, you really do run into the Mexican election which does provide some constraints,” MacNaughton told reporters in Ottawa after an event with his U.S. counterpart, Kelly Craft. “It’s not the end of the world — we will continue to negotiate as long as people want to negotiate— but I think it would be better for everyone if we could come to some agreement sooner than that.”

Andrés Manuel López Obrador, the main opponent of Mexico’s right-leaning incumbent government, has promised to scrap energy reforms if he is elected in July, reversing a key bright spot in trade negotiations between Canada, the U.S. and Mexico. López Obrador has also proposed other populist and anti-trade policies that threaten to derail NAFTA talks if he assumes power.

The time has come to leave political rhetoric behind and find a workable agreement in principle that officials can hammer out later, MacNaughton said.

“There are still four or five sticking points,” he said. “I think (if ) we roll up our sleeves and work hard on them we can at least get to the point where we’ve got an understanding, whether it be an agreement in principle or whatever it is, which we then allow technical people to work on.”

MacNaughton also stressed that prolonged NAFTA talks continue to cause business investment to slow, echoing comments by Bank of Canada officials in recent weeks. “It’s just the uncertainty that causes people to sit on their wallets rather than make investments,” he said.

MacNaughton’s comments came during an event in Ottawa hosted by the Energy Council of Canada, where he and Craft, the U.S.’s ambassador to Canada, discussed energy trade between the two countries.