US seeks NAFTA resolution before new Mexican government installed

US seeks NAFTA resolution before new Mexican government installed

Compromises reportedly being reached before Dec. 1 deadline.

September 20, 2018

The Trump administration continues to renegotiate the North American Free Trade Agreement (NAFTA) with the governments of Mexico and Canada, with leaders of all three nations eyeing the pending installation of a newly elected government in Mexico as a critical deadline.

A mid-September update of the negotiations by the Toronto-based Financial Post indicates negotiators from all three nations have at times managed to create distrust with the others, but compromises nonetheless appear to have been reached.

Negotiations conducted thus far may have proven pointless if an agreement is not reached and ratified by Dec. 1, when a newly elected left-wing government will assume power in Mexico City. Newly elected Mexican President Andres Manuel Lopez Obrador is not necessarily opposed to NAFTA, but he reportedly prefers not to deal with the issue upon assuming office and, if he does it, is uncertain what positions he might take.

Among the compromises reportedly reached by negotiators from the United States and Mexico is a 16-year life span for the new agreement, though it will be reviewed every six years. That does not deviate too far from President Trump’s initially stated desire for a treaty that could be reviewed every five years.

In late August, that compromise and several others were announced by the U.S. and Mexican governments, stemming from a set of negotiations that largely did not involve Canada.

After that round of negotiations, President Trump stated he was willing to sign a two-way agreement between the U.S. and Mexico without Canada. “The name NAFTA has a bad connotation because the United States was hurt very badly by NAFTA,” he commented.

Subsequently, Mexico in particular has expressed its desire for any agreement to include all three nations, and in September reports have emerged that negotiators from all three nations are again resolving differences.

The Financial Post article indicates compromises are being reached pertinent to initial U.S. demands that would have restricted the ability of Mexican and Canadian companies to bid on infrastructure projects in the U.S.

Other negotiating points have involved the metals and the automotive industries. On the automotive side, Mexico has agreed to wage increases for auto workers, something that could help smooth out automotive component content and vehicle import quota demands by the U.S.

On the metals side, the late August agreement between the U.S. and Mexico, somewhat surprisingly, did not guarantee that the U.S. would lift tariffs applied to steel and aluminum imported from Mexico (or, presumably, Canada, if added).

How governments and companies in the three nations resolve trade disputes reportedly remains a sticking point in the negotiations, according to the Financial Post.

Update: As of Sept. 30, the nations in question reached a deal concerning NAFTA. Please watch our website for an updated story.