Trump hints U.S., Mexico on verge of trade agreement amid NAFTA renegotiation

WASHINGTON, United States – The United States (US) and Mexico are close to reaching a consensus over key issues stunting efforts to renegotiate the North American Free Trade Agreement (NAFTA), officials from both countries said on Saturday, August 25.

The trilateral treaty, which includes Canada, has been a key target in the US president’s aggressive trade strategy, and he has repeatedly threatened to scrap it altogether, branding it a “disaster.” (READ: Mexico, US close to a deal on NAFTA overhaul)

But after a year of intense negotiations to salvage the 25-year-old pact, the US and Mexico now appear close to a point where Canada – which had been waiting for US-Mexican agreement on auto industry rules – can rejoin the talks.

Speaking to reporters on Saturday, Mexico’s incoming government’s negotiator suggested the US has even eased off on demands for a contentious “sunset” clause.

“Our relationship with Mexico is getting closer by the hour,” US President Donald Trump tweeted. 

“Some really good people within both the new and old government, and all working closely together….A big Trade Agreement with Mexico could be happening soon!” he added.

Our relationship with Mexico is getting closer by the hour. Some really good people within both the new and old government, and all working closely together….A big Trade Agreement with Mexico could be happening soon!

— Donald J. Trump (@realDonaldTrump) August 25, 2018

On his way into Saturday’s talks in Washington, Mexican Economy Minister Ildefonso Guajardo praised the US president’s “optimism,” but remained cautious.

“I think, depending what happens today, we could confirm it,” he said. “But we are still not there, as I have said before.”

“Today will be an important day,” he added. “Nothing is finished until everything is really finished.”

Guajardo and Mexico’s Foreign Minister Luis Videgaray have been shuttling back and forth to Washington for more than a month for meetings with US Trade Representative Robert Lighthizer to try to iron out major bilateral stumbling blocks, including rules for the auto market, before the end of August.

Jesus Seade, an economic advisor to Mexico’s incoming president, Andres Manuel Lopez Obrador, has also been participating in portions of the talks.

According to him, the US’ “sunset” proposal – to require that the pact be reauthorized every 5 years –  has been “taken out,” with new alternatives under discussion.

“It is no longer what the US proposed in any way, it is an approach focused on future evaluation and continuation,” he said.

‘We’re doing well’

Guajardo had declined on Friday, August 24 to go into detail on the topics remaining with the US, but he said the agreement could happen at any time.

Aside from the “sunset” proposal, issues on the agenda were dispute settlement mechanisms – including a proposal to exclude some industries from settlement provisions – and the auto-market rules. 

One of the White House’s goals going into the talks was to significantly increase the proportion of US parts in the auto sector.

Seade insisted the issue of auto country-of-origin rules was “basically resolved,” with only details yet to be finalized.

He also backed Trump’s suggestion that an agreement is not far off.

“He’s a man whose style I really like,” Seade said. “I think this reflects reality, I think we’re doing well.”

He added that he expected the Mexican delegation to remain in Washington until Monday, August 27 or Tuesday, August 28 at the least.

The US and Mexico are keen to seal a new deal before Mexican President Enrique Pena Nieto hands over power to Lopez Obrador on December 1. For that to happen, the US Congress must be notified 90 days in advance.

Foreign Minister Chrystia Freeland of Canada said earlier in the week that she was encouraged by the progress and would rejoin the talks once bilateral discussions concluded.

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