U.S., Mexico push for NAFTA autos deal, eye Canada's return

Andrew Cummings
August 25, 2018

"What we're doing here is trying to get and solve the issues that are most important between the USA and Mexico - that will lead to a trilateral meeting with Canada", he said.

"We hope that we'll have a solution in the next couple of hours, or the next couple of days", Mexican Economy Minister Ildefonso Guajardo told reporters before entering the offices of US Trade Representative Robert Lighthizer for NAFTA talks.

Canada has been waiting for the Mexican and United States teams to reach common ground on autos before rejoining the negotiations.

"And Canada will very much have a voice in the finalization of all of this", Freeland said.

Trump economic advisor Kevin Hassett told CNBC earlier this week the US was near a deal with Mexico on NAFTA.

Canada, Mexico, and the United States have all publicly insisted that there is no rift and the Mexico-U.S. talks leave out Canadian negotiators simply because the matters under discussion chiefly concern those two countries. The American Automotive Policy Council (AAPC), which represents the "Big Three" manufacturers in Detroit (i.e. Ford, GM and Chrysler), said it was "encouraged" by the direction of the discussions, adding that it shared Trump's "overall goals of strengthening US auto manufacturing and creating jobs".

The letter also pointed out that national security tariffs on cars, auto parts and steel and aluminium could mitigate the benefit of NAFTA - putting a question mark behind the continued presence of foreign vehicle manufacturing in the U.S. Once again, Trump's interventions on trade threaten to have an effect opposite to their stated intention.

"I think the handshake happens when everybody's done."

The three parties had not been expected to announce an agreement until Canada returned to the negotiating table.

Last week, Trump suggested that Canada had deliberately been frozen out of the NAFTA talks on objective. The US has been seeking to increase that threshold and to add new mandates requiring a certain percentage of each vehicle be produced by workers earning at least US$16 an hour.

Ms. Freeland declined comment on what the US-Mexico compromise looks like, saying she would leave it to them to eventually elaborate once talks are concluded. "It will only work out to our favour".

Guajardo and Lighthizer began meeting at the end of July after negotiations between the three partners stalled in May.

The news agency said automakers' position was in a previously unreported 16 August letter from their Here for America group to top trade-focused members of congress.

Although progress has been made on the automotive question in recent weeks, other issues, including a USA "sunset" proposal that could kill NAFTA after five years and future dispute-resolution mechanisms, remain unresolved.

On Wednesday, Seade confirmed that the two nations have also been haggling over unquestionably trilateral issues, such as the American request for a sunset clause that would require NAFTA to be re-approved every five years. That would allow it to be signed before López Obrador takes over as president on December 1, given the 90 days of review by Congress required under American law. In 2013, however, the Mexican government opened up the industry to investment - a decision opposed by Obrador.

Other reports by iNewsToday