U.S. said to make pro­posal that could kill pact in 5 years

The Denver Post - - BUSINESS - By Eric Martin, Josh Wingrove and An­drew Mayeda

U.S. ne­go­tia­tors on Wed­nes­day pre­sented a pro­posal for a so­called “sun­set clause” that would see the North Amer­i­can Free Trade Agree­ment ex­pire af­ter five years un­less the par­ties can agree to ex­tend it, ac­cord­ing to two peo­ple fa­mil­iar with the talks.

The pro­posal was pre­sented to a small group of ne­go­tia­tors, ac­cord­ing to the peo­ple, who asked not to be iden­ti­fied dis­cussing pri­vate ne­go­ti­a­tions. The White House de­clined to com­ment on the NAFTA talks. The U.S. Trade Rep­re­sen­ta­tive’s press of­fice didn’t im­me­di­ately re­spond to a re­quest for com­ment.

Canada and Mex­ico re­jected the idea of a sun­set clause af­ter Com­merce Sec­re­tary Wil­bur Ross floated it last month, say­ing it would cre­ate so much un­cer­tainty for busi­nesses that it could hurt long-term in­vest­ment. The idea of a sun­set clause has been among the most con­tentious pro­pos­als for a pact that al­ready has a rel­a­tively straight-for­ward exit pro­vi­sion — a coun­try can leave af­ter giv­ing six-months’ no­tice of with­drawal.

Pres­i­dent Don­ald Trump has re­peat­edly threat­ened to exit the pact if he can’t get more fa­vor­able terms. Ne­go­tia­tors be­gan the fourth round of dis­cus­sions to re­work Nafta on Wed­nes­day out­side Wash­ing­ton.

Mex­ico’s am­bas­sador in Wash­ing­ton Geron­imo Gu­tier­rez has said a ter­mi­na­tion clause would erode busi­ness con­fi­dence in the re­gion, while his Cana­dian coun­ter­part has said the Trump ad­min­is­tra­tion prob­a­bly wouldn’t find much do­mes­tic sup­port for the pro­posal.

“If ev­ery mar­riage had a fiveyear sun­set clause on it, I think our di­vorce rate would be a heck of a lot higher,” Canada’s am­bas­sador to Wash­ing­ton David MacNaughton said last month. “We can have that dis­cus­sion, but I re­ally do think it won’t be Mex­ico and Canada that are push­ing back against the sec­re­tary, it will be a lot of Amer­i­cans.”

The U.S. Cham­ber of Com­merce has warned against so­called “poi­son pill” pro­pos­als by the U.S., in­clud­ing the sun­set clause. Those “could doom the en­tire deal,” Thomas Dono­hue, the Cham­ber’s chief ex­ec­u­tive of­fi­cer said Tues­day.

Asked about the sun­set clause Wed­nes­day at an event in Wash­ing­ton, Ross said “Yes, that’s our pro­posal.”

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