U.S. Trade Representative Robert Lighthizer and a delegation of out-going and in-coming Mexican trade officials have been conducting intensive NAFTA negotiation talks for the past several weeks. The out-going Mexican officials, led by Ildefonso Guajardo, are optimistic terms of agreement can be reached with the U.S; the incoming Mexican officials led by AMLO’s Jesus Seade, not so much.
The key issue is still the NAFTA fatal flaw that allows both Canada and Mexico to exploit their access to the U.S. market as brokers for imported Asian parts, assembled in Mexico/Canada, and the finished goods shipped into the U.S. That structural issue remains unresolved; hence the impasse.
Meanwhile, Canadian Foreign Minister Chrystia Freeland wants to reenter the trade discussion after being shut out since the beginning of May.
(Reuters) – Canada is “very keen” on concluding negotiations to renew the North American Free Trade Agreement as soon as possible, Foreign Minister Chrystia Freeland said on Saturday, amid signs of progress after months of delays.
Talks to modernize the 1994 trade pact started in August 2017 but have dragged on much longer than expected as Canada and Mexico pushed back against far-reaching U.S. demands for reform. President Donald Trump has said he will walk away from NAFTA unless major changes are made.
In a renewed push, Mexican and U.S. cabinet ministers held a series of meetings in Washington over the past week in a bid to work out their differences. One Mexican official expressed optimism that some kind of agreement could be reached by the end of the month.
“I and Canada are very, very keen to get it done as quickly as possible,” Freeland told reporters on a conference call. She did not answer directly when asked whether the end of August was a realistic deadline.
Mexican and U.S. officials are due to meet again next week to work on contentious issues such as wages and rules governing how much North American produced content an automobile must contain to qualify for duty-free status.
Freeland said she was ready to join the talks at any time but did not give details. Canadian officials dismiss speculation that she is being sidelined. (read more)
Ever since the end of Round #6 (January 2018) USTR Robert Lighthizer has not cared for the Canadian team, and who can blame him. Princess Rainbow Sparkles Chrystia Freeland has demanded the addition of trans-gender native equity rights, climate issues and the ability to exploit access to the U.S. markets in all Canadian bi-lateral trade constructs.
Previously Lighthizer responded:
“Free trade agreements are essentially grants of preferential treatment to other countries in exchange for an approximately equal grant of preferential treatment in their economy. Thus, it is reasonable from time to time to assess whether the bargain has turned out to be equitable.”
[…] “I would like to comment on two proposals by the Canadians, one of which has been in the press quite a bit, and that is a presumed compromise on rules of origin.
We find that the automobile rules of origin idea that was presented, when analyzed, may actually lead to less regional content than we have now and fewer jobs in the United States, Canada, and likely Mexico. So this is the opposite of what we are trying to do.
In another proposal, Canada reserved the right to treat the United States and Mexico even worse than other countries if they enter into future agreements. Those other countries may, in fact, even include China, if there is an agreement between China and [Canada].
This proposal, I think if the United States had made it, would be dubbed a “poison pill.” We did not make it, though. Obviously, this is unacceptable to us, and my guess is it is to the Mexican side also.
Finally, I would like to refer, because I think it fits into this context to an unprecedented trade action that Canada brought against the United States very recently. It constitutes a massive attack on all of our trade laws. If it were successful, it would lead to more Chinese imports into the United States and likely fewer Canadian goods being sold in our market.
Now we understand that countries often challenge specific actions taken by another country in the context of trade laws. This is normal and what we expect. But this litigation essentially claims that 24 years ago, the United States effectively gave away its entire trade regime in the Uruguay Round. Of course, we view this case as frivolous, but it does make one wonder if all parties are truly committed to mutually beneficial trade. It also underscores why so many of us are concerned about binding dispute arbitration. What sovereign nation would trust to arbitrators or the flip of a coin their entire defense against unfair trade? (more from the end of round #6)