NAFTA Trio Meets Amid Growing Optimism for Deal
Senior ministers from the three NAFTA countries are gathering in Washington amid growing signs of optimism that they could find common ground on the toughest issues.
U.S. Trade Representative Robert Lighthizer will meet with his Mexican and Canadian counterparts April 6, the first such high-level trilateral negotiating session since March 5. Talks have warmed considerably, raising hopes of some kind of agreement in principle soon despite warnings that key gaps remain.
鈥淲e鈥檙e working very hard on NAFTA with Mexico and Canada. We鈥檒l have something, I think, fairly soon,鈥 President Donald Trump said April 5, adding he told his staff to 鈥渢ake it nice and easy鈥 in talks. 鈥淭here鈥檚 no rush.鈥 Canadian Prime Minister Justin Trudeau struck a similar tone, saying April 5 that talks 鈥渁re moving forward in a significant way.鈥
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However, it remains unclear how much progress has been made 鈥 the majority of NAFTA chapters remain unfinished and key divisive issues unresolved after months of talks. But Trump鈥檚 optimism over a NAFTA deal comes as White House officials suggest there鈥檚 wiggle room to negotiate a resolution to an escalating U.S.-China trade dispute over proposed tariffs. There are signs he鈥檚 looking to made a deal on NAFTA, too.
Possibly complicating the path to a deal, Trump鈥檚 decision to send troops to the southern U.S. border has touched a raw nerve in Mexico. All four candidates running in Mexico鈥檚 July presidential election have condemned the troop deployment plan and were in turn praised by Mexican President Enrique Pena Nieto.
The United States and Mexico have an 鈥渋ntense and dynamic relationship, which understandably also poses challenges. Nevertheless, these will never justify threatening or disrespectful attitudes between our countries,鈥 Pena Nieto said April 5 in a statement on his Twitter account.
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Regarding the talks, the United States is said to have softened its demands on the auto sector, a crucial area of discussion, but still is seeking controversial concessions on dairy, government procurement and a sunset clause. The April 6 meeting of the top ministers could signal the path forward 鈥 is the Trump administration ready to bargain, or just posturing to sway public opinion as it spars with China over new tariffs?
鈥淚 think things are coming to a head in a good way,鈥 said Welles Orr, a former assistant U.S. Trade Representative under George H. W. Bush and now a senior international trade adviser at law firm Miller & Chevalier. He said the Trump administration was caught off-guard by China鈥檚 tariff pushback and is looking for a win on trade. The United States has concluded that if 鈥渢hey鈥檝e got a deal in principle, they can call it a win, and it鈥檚 a victory for the president, and boy let鈥檚 move on to the other stuff.鈥
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Canada鈥檚 dollar, known as the loonie, strengthened this week amid talk of a potential deal, while Mexico鈥檚 peso is trading at a six-month high.
Lighthizer was scheduled to meet with Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo for dinner in Washington on April 5 before the trio meet for a formal session. Freeland said this week the three countries are 鈥渕aking some good progress,鈥 including 鈥減romising鈥 developments on the critical issue of the auto sector.
NAFTA talks look to have put aside formal, wide-ranging rounds of negotiations for now. The United States had been expected to host one this month but has not yet scheduled it. 鈥淭he NAFTA countries have been negotiating continuously on ministerial and official levels since the last formal negotiating round ended in March. Officials are continuing to meet this week as the renegotiation of NAFTA moves forward,鈥 USTR spokeswoman Emily Davis said in a written statement April 5.
