NAFTA Negotiations Could Still Finish Next Week, Mexican Official Says
President Donald Trump's frequent trashing of NAFTA doesn't really matter when the principals sit around the table, as they did May 11, said Mexico's Economy Minister Ildefonso Guajardo. "President Trump has been very consistent, even before entering politics, he has had that view," Guajardo said outside the Office of the U.S. Trade Representative. While he said Mexico, Canada and some in the U.S. believe the economic integration of North America has been positive, he explained: "That is not what we are negotiating. We are not negotiating views. We are negotiating realities. We do believe, and that is something we agree with President Trump, that trade agreements and public policy have to be aware of how you have distortions in the system. And you have to accommodate the public policy to help those that feel displaced for trade. In that sense, these are new times for policymakers."
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Canadian Foreign Minister Chrystia Freeland said no one should read anything into the fact that the trilateral meeting ended quickly. "Sometimes a long meeting is a good meeting, sometimes a short meeting is a good meeting. And vice-versa," she said. "The atmosphere is good. There is a lot of good will, at the political level, at the level of officials... . There’s a commitment to doing, really, what it takes to get it done."
However, the tone from USTR sounded less upbeat. Several hours after his counterparts left, the USTR called the current NAFTA "a seriously flawed trade deal" and said the U.S. "is ready to continue working with Mexico and Canada to achieve needed breakthroughs. The USTR said negotiations are covering the objectives laid out by Congress on "intellectual property, dairy and agriculture, de minimis levels, energy, labor and more."
In order for the current Congress to vote on it, negotiators only have one more week to make breakthroughs, according to Speaker of the House Paul Ryan. Guajardo said that's not impossible, because once "the tough issues" are resolved, the rest can be settled rather quickly. "But as I told you this morning, we are not going to sacrifice quality of an agreement for the pressure of time."
He added, "We are aware of calendars. We know that uncertainty is not good for markets. It will be in the best interest of the three countries to really be efficient in terms of landing the solutions. But again, it has to be a very good and balanced package."
According to Freeland, rules of origin for auto content continue to dominate the discussion. Mexico has brought a counter-offer to the U.S. demand that cars have 75 percent North American content to enter duty-free from Mexico or Canada. Guajardo said they are "trying to bridge the gap between the Mexican proposal and the U.S. proposal."
"I think in Mexico's view, it has been a very, very good week for advancements," he said. "I think that now the three countries are getting a little bit closer in the views of how you have to really decide a landing zone for the rules of origin in the auto market industry."
Trump did not directly answer a question on whether changes to NAFTA could hurt U.S. automakers as top auto executives met with him at the White House on May 11, but said he wants them to manufacture more cars in the U.S.. According to reporters at the White House, he singled out Fiat Chrysler CEO Sergio Marchionne. "Thank you, you're moving [a factory] to Michigan from Mexico," Trump said. "That's what we like. Right now he's my favorite man in the room."
Rules of origin are not the only matter being discussed. Guajardo said all the outstanding issues are the ones that have been in the news media -- Mexico's and Canada's desire to preserve the Investor-State Dispute Settlement system, and U.S. Trade Representative Robert Lighthizer's insistence on jettisoning it; and Lighthizer's push for a sunset clause, which Mexico and Canada oppose.
Freeland had notes on her hand that included "sunset," and another note said "Cal train," a possible link to procurement rules, since that commuter rail system in Northern California is buying electrical cars as it moves away from diesel operations. Freeland declined to talk specifics, but did say the teams are "making steady progress on closing some of these chapters" that concern "cutting red tape at the border." The three ministers will be on call to arrange the next top-level meeting, Guajardo said, once technical teams have provided "some elements of solutions."