A key round of talks to update the Nafta trade pact formally opened with Canada and Mexico seeking to show more flexibility about addressing hard line US demands that they had previously dismissed as unworkable.
US President Donald Trump, who says the North American Free Trade Agreement is a “disaster,” has frequently threatened to ditch the pact unless big changes are made. There is relatively little time left to thrash out a deal under the current schedule.
Negotiators met in Mexico City for the fifth of seven planned rounds that are due to wrap up by the end of March to avoid affecting Mexico’s presidential election.
“We’re just getting started. There’s a long way to go. It’s a challenging negotiation,” chief Canadian negotiator Steve Verheul told reporters.
Canadian and Mexican officials initially indicated they would simply not discuss contentious US proposals such as a five-year sunset clause, and boosting the North American content of autos to 85 per cent from the current 62.5 per cent.
The focus in Mexico City would be on making arguments to the US side as to why their proposals as written would not work, a Canadian government source said.
Canada, the source added, was happy to discuss so-called rules of origin governing auto content but insisted the 85 per cent figure was impossible.
Canadian sources said they were open to a Mexican proposal to review Nafta every five years rather than the US plan to bring in a sunset clause that would automatically terminate the deal if it was not renegotiated.
Canada and Mexico both send a large majority of their goods to the United States and prefer the treaty continue rather than deal with the economic disruption caused by a US withdrawal.
That said, Mexico has stepped up its efforts this year to find alternative markets. Mexico’s Foreign Minister Luis Videgaray met with his Russian counterpart Sergei Lavrov in Moscow on Friday to emphasise openness to doing business with nations other than the United States.
“At the same time as we carry out this negotiation process, Mexico is expanding its commercial horizons,” Videgaray told a news conference.
A senior official in Mexico’s foreign ministry said the remarks were intended to send a message to Washington that “we don’t depend on them.” — AFP
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