PROGRESS PROMISED
Some thorny issues remain unsettled
After five days in Mexico City, negotiators overhauling the Nafta deal say they will have ‘results’ by the end of the month.
MEXICO CITY: Negotiators overhauling the North American Free Trade Agreement said on Tuesday that they would have “results” by the end of the month, but left some of the stickiest issues hanging as they wrapped up their latest talks.
After five days of negotiations in Mexico City — their second round — the United States, Mexico and Canada still had no concrete details to report on their revamp of the 1994 trade deal.
But they promised progress by the end of the next round, scheduled for September 23 to 27 in Ottawa, Canada.
“We have instructed our chief negotiators to commit to defining the chapters that are closest to completion so we can start seeing the first results at the third round of talks,” Mexican Economy Minister Ildefonso Guajardo told a press conference.
In the build-up to the second round, President Donald Trump, who demanded the renegotiation, renewed his attacks on Nafta, blaming the deal for US job losses — a regular theme during his campaign — and saying the United States would “end up probably terminating” it.
US Trade Representative Robert Lighthizer was more conciliatory in Mexico City, reporting that “we have found mutual agreement on many important issues,” and saying negotiators were working at “record pace.”
But he echoed Trump’s rhetoric on Mexico’s impact on the US manufacturing sector.
“We also must address the needs of those harmed by the current Nafta, especially our manufacturing workers. We must have a trade agreement that benefits all Americans, and not just some at the expense of others,” Lighthizer said.
“I am hopeful we can arrive at an agreement that helps American workers, farmers and ranchers while also raising the living standards of workers in Mexico and Canada.”
Canadian Foreign Minister Chrystia Freeland said negotiators were working toward a “win-win-win” deal.
“I am here to say that all three partners are absolutely committed to getting this done,” she said.
Some thorny issues were left unsettled, however, including the $64 billion US trade deficit with Mexico — much lamented by Trump — and the “rules of origin.”
The United States is pushing to change these rules, including those governing the hotly debated auto sector. It has floated the idea of requiring a certain percentage of cars’ components to be built in the US in order to remain duty-free.
Guajardo told journalists no official US proposal had yet been tabled on either matter.
He reported progress on other points, such as eliminating technical barriers to trade — without going into detail.
Negotiators said they had tackled more than two dozen chapters of the 1,700page deal.
“The lack of details in the negotiations show that the room of manoeuvre and the depth of the changes is likely to be limited,” said the Eurasia Group consultancy.
“All three parties will work to reach an agreement and not alter Nafta fundamentally.”
Instituted in 1994, Nafta eliminated most tariffs across a region representing some 28% of the world economy.
To supporters, it has been instrumental in creating tightly integrated supply chains that ensured North America’s competitiveness.
To opponents, it has gutted American industry and unleashed a race to the bottom in terms of wages.
Low wages in Mexico were under a microscope during this round of talks.
The daily minimum wage, about $4.50, is well below the hourly minimum wage in both the US and Canada.
Mexico, which became a major exporter under Nafta — sending some 80% of its exports to the United States — has some of the worst wages in Latin America.
Wages have been basically stagnant here for the past 23 years in inflation-adjusted terms, despite Nafta proponents’ argument that free trade would cause them to rise.
Both the US and Canada are pressuring Mexico on the issue.
But Guajardo said Mexico would reject any attempt to “set salaries by decree.”