NAFTA talks bog down ahead of major deadline

WASHINGTON — Negotiations over a new North American trade deal have hit a major snag, leaving White House officials increasingly uncertain over their ability to hit their May 18 deadline for securing congressional approval of a new deal before year’s end.

The main stumbling block involves a dispute over determining which automobiles are given duty-free treatment under the agreement, according to five industry and U.S. government sources.

After almost nine months of negotiations, the U.S. and its trading partners Canada and Mexico remain far apart on a host of contentious issues, including U.S. demands that the treaty must be renewed every five years.

Two weeks ago, White House officials were optimistic about prospects for a breakthrough in the talks, a senior administration official said. While U.S. officials have not abandoned hope of success, they acknowledge that the odds of quickly reaching a deal that fulfills President Donald Trump’s campaign promise to return lost manufacturing jobs to the United States are growing longer, the official added.

“The moment of truth is upon us,” said Eric Miller, president of Rideau Potomac Strategy Group, a political advisory firm.

Missing next week’s deadline could have significant consequences, given the political calendars in both the United States and Mexico. Depending upon what happens in the next 10 days, President Trump

could opt to pause the negotiations, claim a partial agreement or even withdraw from the existing accord, though that appears unlikely.

The president’s authority to negotiate trade deals that Congress must approve or reject without amendment expires July 1, coincidentally the date of Mexico’s presidential election. U.S. officials say that May 18 represents the deadline for securing congressional approval under his existing authority this year, given the various timelines specified in the legislation.

The front-runner in Mexico’s July 1 presidential election is populist Andrés Manuel López Obrador, who could prove a tougher negotiating partner if the negotiations continue past this month. And Democrats appear likely to recapture the House of Representatives, complicating prospects for winning

congressional assent to the new deal.

There has been talk that the administration might try to salvage the talks with a high-risk strategy involving withdrawing from the existing agreement and presenting Congress with a choice between no deal and a partial “agreement-in-principle.”

But several influential members of Congress have warned the president not to gamble.

“We write to express extreme concern over reporting that your administration is considering sending up to Congress a preliminary and incomplete NAFTA renegotiation based on ‘principles,’” wrote Reps. Sander Levin, D-Mich., and Ron Kind, D-Wis., in a letter to the White House. “Any attempt to hold Congress hostage would threaten your administration’s negotiating authority and only serve to sow chaos in the U.S. economy.”

NEW YORK TIMES 2017 The U.S. wants to rework NAFTA by the end of May, but that’s complicated by the Trump administration’s refusal to budge from proposals aimed at bringing manufacturing back to the U.S.