Mexico, US near agreement on NAFTA: minister

World
Europe

US and Mexican trade negotiators are “hours” away from squaring away bilateral differences on the North American Free Trade Agreement (NAFTA) but work with Canada is likely to stretch into September, a top Mexican official said on Sunday.

Mexican Economy Minister Ildefonso Guajardo told reporters that work with Canada, which has sat out the latest phase of NAFTA talks, would take at least a week, though he was optimistic Mexico and the United States were close to an agreement.

“I would say that we’re practically in the final hours of this negotiation,” he told reporters as he arrived for talks at the offices of US Trade Representative Robert Lighthizer.

After the talks broke for lunch a couple of hours later, Guajardo said he could not declare victory yet.

The Mexico-US discussions have focused on crafting new rules for the automotive industry, which US President Donald Trump has put at the heart of his drive to rework the 24-year-old pact he says has been a “disaster” for American workers.

The two sides have been gradually nearing a common position, and one source close to the negotiations said at the weekend there was now “little” separating the two on autos.

Industry sources say they are close to agreeing on raising the regional automotive content threshold for tariff-free access under NAFTA to around 75 percent from 62.5 percent.

Flags of Canada, Mexico and the US are seen before a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico, March 5, 2018. /Reuters Photo

Trump said on Saturday that Washington could reach an agreement with Mexico “soon” as the chief trade negotiator of Mexico’s incoming president signaled possible solutions to energy rules and a contentious US “sunset clause” demand.

Since Mexico’s July 1 presidential election, the bilateral talks have been complicated by divisions between the incoming and outgoing Mexican administrations over energy policy.

The team of Mexican President-elect Andres Manuel Lopez Obrador has resisted enshrining the 2013-14 opening of the oil and gas sector enacted by outgoing President Enrique Pena Nieto in the new NAFTA, people close to the talks say.

Long skeptical of foreign companies entering the Mexican oil industry, Lopez Obrador opposed Pena Nieto’s energy reform.

Jesus Seade, the incoming Mexican government’s chief NAFTA negotiator, said the issue had been “ironed out” at the NAFTA talks, without going into detail. He said this week it was not a “substantive” matter and that Lopez Obrador’s team had wanted to check the terms were consistent with the Mexican constitution.

If three-way talks run into September, final approval of the deal in Mexico will likely pass to Lopez Obrador, because under fast-track authority, the US Congress needs 90 days’ notice to vote on a new NAFTA once the renegotiation is finished.

Lopez Obrador is due to take office on Dec. 1.

Canadian Foreign Minister Chrystia Freeland said on Friday her government’s return to the talks would depend on how quickly the United States and Mexico could resolve their differences.

(Top photo: Mexico's Economy Minister Ildefonso Guajardo at a news in Mexico City, May 1, 2018./Reuters Photo )

Source(s): Reuters