Big gaps remain on some major issues in the talks over NAFTA.
Trump says there’s no rush to close deal with Mexico, Canada
Negotiators racing to reach a new North American trade deal remain far apart on several major issues, as time dwindles to secure an agreement that the current Congress could vote on, according to individuals familiar with the discussions.
Diplomats from the United States, Canada and Mexico had hoped to announce progress toward a replacement for the 24year old North American Free Trade Agreement by Friday, when regional leaders are scheduled to meet in Peru for the Summit of the Americas. President Donald Trump’s decision to skip the meeting to monitor the Syrian situation reduced pressure to make a public statement.
“We don’t have as many concrete results as you may have expected,” said one individual familiar with the talks, who was not authorized to speak publicly.
Officials hope to cobble together an agreement-in-principle by early May so that the president can notify Congress of his intent to sign the deal — as required under legislation granting him negotiating authority — in time for a potential vote late this year.
“We’ve got a relatively short time frame within which to get this done,” said a second individual involved in the negotiations, who asked for anonymity to discuss confidential discussions.
Robert Lighthizer, the president’s chief trade negotiator, estimates that the talks are 80 percent complete, according to Sen. Pat Roberts, R-Kan., chairman of the Senate Agriculture Committee, who spoke with him earlier this week.
“If we can just get that 20 percent. That’s what we need,” Robert told reporters.
The unfinished work includes the same issues that have dogged the talks since their August inception, according to Dan Ujczo, an international trade lawyer at Dickinson Wright. U.S. proposals on automobile content, government procurement, intellectual property, investor dispute settlement, and treaty expiration — dubbed “poison pills” — remain key stumbling blocks.
“That 20 percent is not moving,” he said.
Trump long has been a vocal critic of NAFTA, which he derides as a “bad joke” and blames for siphoning manufacturing jobs from the United States. In August, Lighthizer opened talks aimed at overhauling the existing treaty with Canada and Mexico.
In recent weeks, the negotiating pace has accelerated, and officials at the technical level are now meeting continuously. At the White House on Thursday, before meeting with Republican governors and senators from several farm states, Trump denied hurrying to close a deal and said prolonged uncertainty was in the U.S. interest.
“Nobody is moving into Mexico, as long as NAFTA is in flux no company is going to spend a billion dollars to build an automobile plant. I told the Mexicans we can negotiate forever, as long as we have this negotiation going nobody is going to build billiondollar automobile plants,” the president said. “We’re getting pretty close to a deal. It could be two weeks, it could be three months, it could be five months. I don’t care.”
Trump also has exempted Mexico and Canada from tariffs of 25 percent on steel and 10 percent on aluminum until May 1, another factor affecting the pace of the talks. The White House has said that extensions may depend upon how the negotiations fare.
The U.S. last month sought to spur the talks by making a new proposal on a core demand that automobiles covered by the treaty contain more American-made components. The existing treaty requires that 62.5 percent of a vehicle’s components originate in North America. For months, the U.S. has been demanding an increase to 85 percent along with a new requirement that 50 percent of the vehicle come from American plants.
In March, the U.S. proposed dropping the 50 percent provision and counting parts as North American-made if they were produced by workers making an hourly wage of at least $15. The proposal was aimed at reducing the incentive for U.S. automakers to shift work or expand operations in Mexico, where the average auto industry hourly wage hovers around $2.40.