As the fourth round of NAFTA negotiations were completed in Washington on Tuesday, October 17, 2017, significant new obstacles to the trade talks are emerging. As a result, the fifth round of talks has been postponed until mid-November.
Specifically, Canada and Mexico have rejected the U.S.’s proposals on the elimination of NAFTA dispute panels in AD/CVD decisions, dairy, automotive content, government procurement, country-specific rule of origin rules, and a sunset clause.
U.S. Trade Representative Lighthizer, Mexican Economy Minister Guajardo, and Canadian Foreign Minister Freeland noted in a joint statement that the extended timelines provide the countries with an ability to discuss the challenging issues in light of the stark “conceptual gaps” between them. They also stated that they have called upon negotiators from the three countries to “explore creative ways to bridge these gaps.”
Guajardo told reporters on Tuesday that while Mexico wants to find a solution that is a win for all countries involved, it will not sign onto an agreement that is detrimental to Mexico’s national interests.
Freeland, said she was disappointed in the “winner-take-all-mindset” of the negotiations, and that while an agreement for an improved NAFTA is “absolutely achievable,” it cannot be reached with an “approach that seeks to undermine NAFTA rather than modernize it.”
Lighthizer noted he’s not focused on the possibility of the U.S. exiting NAFTA, but instead on getting “a good agreement” in place. He stated he was “surprised and disappointed by the resistance to change” from Canada and Mexico, and that the three countries would do “just fine” without NAFTA. He further explained that a core objective of the U.S. in negotiations is to shrink its trade deficit.
Following the next round of negotiations in Mexico City in mid-November, it has been reported that chief negotiators will meet in Washington in December and that further negotiations will be scheduled into the first quarter of 2018, with the sixth round of negotiations taking place in Canada.