Optimism on Nafta
Mexico has said that differences are narrowing in talks to revamp North American Free Trade Agreement (Nafta) even as President Donald Trump seemed to sap some goodwill by calling the trade pact a ‘a bad joke’.
Mexico City — Mexico said differences are narrowing in talks to revamp Nafta even as President Donald Trump seemed to sap some goodwill by calling the trade pact a “a bad joke” and repeating his demand that the US’s southern neighbor pay for a border wall.
Uncertainty about the path for the negotiation has whipsawed investors, with Trump alternating between saying he prefers to renegotiate and repeating his threats to leave or to use withdrawal as a negotiating tactic. Canadian officials said last week they believe the odds are rising that Trump will give notice of a withdrawal.
While negotiators, who began their work in August, have made progress on more mundane issues like rules of small businesses, they have yet to reach agreement on the topics that the White House sees as key to returning jobs to the US, like content for cars and government purchasing rules. Mexico’s ambassador to the US, Geronimo Gutierrez, said that the nation may be able to accept an increase in the minimum regional content for vehicles. At the same time, he reiterated the government’s long-standing position that it will leave the negotiating table if Trump gives notice of his intention to withdraw.
“We have consensus on around 40 per cent of the issues already,” Gutierrez said in an interview Thursday with Bloomberg Television in Washington.
Raising the requirement for cars built in North America from the current 62.5 per cent regional content is “certainly a possibility, but on rules of origin we need to be very careful to make sure they’re looked at almost on a product-byproduct basis.” The US demand for more North American, and specifically US content in vehicles is among the most contentious issues on the North American Free Trade Agreement negotiating table. Negotiators largely avoided these issues in the latest talks in Mexico City in November and Washington in December, setting up the meetings in Montreal next week as potentially decisive. The talks in Canada officially were scheduled to run from January 23 to January 28 and were extended on Thursday through January 29, when the trade ministers from the three countries will meet.
Mexico and Canada began negotiating with the US at the initiative of Trump, who has repeatedly said the Nafta accord led US companies to fire workers and move factories to Mexico and has promised to pursue a better deal for America. — Bloomberg