30/01/2018 14:05 AST
Discussions to revamp the North American Free Trade Agreement (Nafta) moved from stalemate to actual negotiation during the sixth round of talks that concluded Monday, but a deal was still far from guaranteed as Mexico, Canada and the United States continue to squabble over how to reshape the 24-year-old pact.
Government officials and trade analysts described the mood around the talks as “cautiously optimistic” as Canada, in particular, joined Mexico in offering counterproposals to America’s requests for drastic changes, an outcome that seemed likely to dissuade the United States from imminent withdrawal.
Yet more than six months into the talks, a conclusion still appeared elusive. And tensions between the countries grew as the United States criticised Canada’s suggested changes to the pact on areas including automobile manufacturing and investment.
Robert Lighthizer, the US trade representative, suggested that Canada had been responsible for the stalled talks. He said discussions were now progressing as the nation recognised the need to protect its trading relationships, though he added that talks were not moving fast enough.
“The reality is some of the participants weren’t willing to talk about anything,” Lighthizer said in remarks to the media. “Now, they’re starting to realise that we have to begin to talk. I think that’s a reason for guarded optimism. But you know, I’m never really very optimistic,” he added.
Officials from Canada and Mexico sounded more positive about the prospects for a deal. Ildefonso Guajardo Villarreal, the Mexican economic secretary, said that the three countries were at “a better moment in this negotiation process,” and that progress made so far had put the countries “on the right track to create landing zones to conclude the negotiation soon.”
Chrystia Freeland, the Canadian foreign minister, said that Canada had come to the table “with creative ideas we believed could move us forward.” She also emphasised the benefits of trade with Canada for the United States.
The Nafta pact, negotiated by President George H.W. Bush and signed into law by President Bill Clinton, spurred trade between the three countries by reducing Mexico’s high tariffs on goods from Canada and the United States. But, as President Donald Trump has often highlighted, it also incentivised companies to shift labour-intensive manufacturing to Mexico.
Trump has repeatedly threatened to walk away from the trade pact if it cannot be renegotiated in the United States’ favour, a position that has put him at odds with many in the business community and Congress, who see trade with Mexico and Canada as integral to industries as varied as manufacturing, agriculture and energy. The auto industry, in particular, has arranged its North American supply chains around the deal’s terms.
With talks now reaching into their seventh month, negotiators are about to butt up against several political events that could make an agreement even more difficult, including the Mexican general election on July 1.
The election could usher in a leftist political party that may be less willing to make concessions. The front-runner, Andres Manuel Lopez Obrador, has advocated a more combative approach to the Trump administration.
“Doing this before the Mexican election is critical, because you don’t know who is going to be leading afterward,” said Representative Will Hurd, Republican from Texas, who attended the talks.
The negotiations have faced a series of collapsing deadlines. Last year, officials insisted that the deal must be largely concluded by the end of 2017. Then in October, they decided to extend the talks into the first quarter of 2018, with March widely cited as a deadline.
No new target
Negotiators did not specify a new target for concluding the talks. In remarks on Monday, Freeland said that Canada looked forward to continuing its work at the next ro
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