Mex­ico, Canada to keep talk­ing amid bleak Nafta mood

Show of unity comes af­ter US pro­posal to add clause for rene­go­ti­a­tions ev­ery 5 years

The Straits Times - - WORLD -

MEX­ICO CITY The lead­ers of Mex­ico and Canada have pre­sented a united front for talks with United States Pres­i­dent Don­ald Trump on the fu­ture of the North Amer­i­can Free Trade Agree­ment (Nafta), com­mit­ting to con­tin­ued tri­lat­eral ne­go­ti­a­tions af­ter US ne­go­tia­tors put for­ward a con­tentious pro­posal for a “sun­set clause”.

“As we move for­ward with rene­go­ti­a­tions, we will con­tinue to work to­wards our shared goal of a win-win-win agree­ment to en­sure that the new pro­vi­sions are fair and ben­e­fi­cial to all three coun­tries in­volved,” Cana­dian Prime Min­is­ter Justin Trudeau said, adding that he and Mex­i­can Pres­i­dent En­rique Pena Ni­eto are “con­fi­dent” the three coun­tries can find a Nafta “frame­work” to drive eco­nomic growth.

But of­fi­cials from both coun­tries yes­ter­day said talks un­der way in Wash­ing­ton to over­haul the pact should not add a sun­set clause that would force rene­go­ti­a­tions of the US$1 tril­lion (S$1.36 tril­lion) pact ev­ery five years.

Mex­ico’s Econ­omy Min­is­ter Ilde­fonso Gua­jardo, speak­ing on lo­cal tele­vi­sion, said Nafta should not re­quire the three trade part­ners to re­hash the treaty ev­ery five years or see it dis­ap­pear, as pro­posed by US ne­go­tia­tors. He added that if the US opts to aban­don the treaty, as Mr Trump has threat­ened to do, Mex­ico and Canada would still be sub­ject to Nafta rules.

Canada’s In­ter­na­tional Trade Min­is­ter Fran­cois-Philippe Cham­pagne, ap­pear­ing with Mr Gua­jardo on the same tele­vi­sion pro­gramme, said a sun­set clause would re­sult in un­cer­tainty.

Af­ter Mr Trump mused about break­ing Nafta into bi­lat­eral deals, the Cana­dian and Mex­i­can lead­ers called for the trade deal to be pre­served and mod­ernised, and praised each other for aid pro­vided dur­ing nat­u­ral dis­as­ters.

The US pro­posed its so-called sun­set clause for Nafta on Wed­nes­day, while so-called rules of ori­gin – which de­ter­mine how much of a prod­uct must come from Nafta coun­tries to re­ceive the pact’s ben­e­fits – were set for dis­cus­sion yes­ter­day in Wash­ing­ton.

The rules of ori­gin, par­tic­u­larly for cars, are among the most con­tro­ver­sial sub­jects as Mr Trump aims to repa­tri­ate man­u­fac­tur­ing jobs from Mex­ico by rewrit­ing trade rules.

Mr Pena Ni­eto, who be­gan by thank­ing Mr Trudeau for his sup­port of earth­quake re­cov­ery ef­forts, said their coun­tries were work­ing to boost bi­lat­eral ties and to im­prove Nafta. “Prime Min­is­ter Trudeau and my­self will con­tinue to work to reach a ben­e­fi­cial and pos­i­tive up­grad­ing for the three coun­tries,” Mr Pena Ni­eto said, be­fore later ap­pear­ing to down­play Mr Trump’s threats.

“I would not pay much at­ten­tion to any state­ments other than that which hap­pens at the ne­go­ti­a­tion ta­bles,” he said, adding that the talks can make North Amer­ica a more com­pet­i­tive eco­nomic re­gion by in­clud­ing, for in­stance, ecom­merce. The deal “can­not be good for just one coun­try and we can’t be hostage to only one po­si­tion”, he added.

Mr Trudeau said Canada would not walk away from the ne­go­ti­at­ing ta­ble based on pro­pos­als so far. “We are pleased to be talk­ing about ways we can im­prove Nafta,” he said.

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