(Bloomberg) -- U.S. Trade Representative Robert Lighthizer said progress was made in the latest round of NAFTA talks, while warning negotiations need to speed up to reduce uncertainty.
Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo met privately in Montreal on Monday morning before making a joint appearance before the press.
Lighthizer said “some progress was made” in the latest round, while Freeland said she was pleased with progress so far and Guajardo said the three countries are on the “right track” to reach a deal.
“We finally began to discuss some of the core issues, so this round was a step forward. But we are progressing very slowly. We owe it to our citizens who are operating in a state of uncertainty to move much faster,” Lighthizer said, emphasizing again that he wants to cut the U.S. trade deficit. “We need to modernize and we need to rebalance.”
While NAFTA looks to have avoided collapse for now, talks could run for months or into next year as the three hash out differences. The appearance capped round six, where negotiators agreed on a proposal related to fighting corruption. That followed agreements in previous rounds on small- and medium-sized businesses and competition.
In his remarks, Lighthizer took aim at Canada in particular, saying a recent World Trade Organization challenge mounted by the country is “a massive attack on all of our trade laws.” He also criticized a deficit in goods traded between the countries.
Hanging over talks is U.S. President Donald Trump’s threat to quit the 24-year-old trade pact. Trump has regularly called it a horrible deal and blamed it for U.S. manufacturing job losses, pledging as recently as last week to renegotiate or give a sixth-month notice of withdrawal.
Lighthizer’s counterparts said the progress made so far is important and that challenges remain. Freeland praised the work of negotiators.
“That work, I’m pleased to say, is beginning to bear fruit,” Freeland said.
Guajardo said the countries are making progress with flexibility from all three nations. “We still have substantial challenges to overcome. Yet the progress made so far put us on the right track to create landing zones to conclude this process,” he said.
Lighthizer’s comments were more positive than the trio’s previous joint appearance in Washington in October, when he said he was “surprised and disappointed” by Canadian and Mexican positions so far. The Montreal meeting was the trio’s first since October, as they skipped subsequent rounds in Mexico City and Washington.
The most contentious U.S. demands are on the automotive industry, dairy and agriculture, dispute panels, government procurement and a five-year sunset clause that would kill NAFTA unless the three agree to extend it. This round saw Canadian “ideas” -- officials wouldn’t call them them formal counter-proposals -- on changing how a car’s value is calculated and adding periodic review, rather than a termination clause. Canada and Mexico have also threatened to keep some form of their own investor dispute system that the U.S. wants to opt out of.
Lighthizer rejected the Canadian proposal on cars, saying it would reduce the share of a vehicle made within the three nations. “This is the opposite of what we are trying to do,” he said.
The next round of Nafta talks is scheduled for Mexico City in February. Stakeholders expect subsequent rounds to take place the U.S. and Canada, with discussions potentially running into 2019. Trump had wanted them done by December, though negotiations of this scale typically take years.
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