Negotiations over the future of Nafta were extended into the first quarter of 2018 in a bid to resolve differences after Canada and Mexico rejected what they see as hardline U.S. proposals.
U.S. Trade Representative Robert Lighthizer, Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Minister Chrystia Freeland spoke in Washington Tuesday as battle lines form around contentious proposals to revamp the North American Free Trade Agreement.
“New proposals have created challenges and ministers discussed the significant conceptual gaps among the parties,” Lighthizer said, reading a joint statement at the close of the fourth round of talks Tuesday. “Ministers have called upon all negotiators to explore creative ways to bridge these gaps.”
During their joint remarks to the press, Lighthizer said he’s “surprised and disappointed” by the outcome so far, Guajardo said Mexico has limits to what it can accept in any deal, and Freeland said some of the proposals run counter to World Trade Organization rules.
In the joint statement, ministers reaffirmed their mandate to reach a deal in a reasonable period of time. Mexico will host the the fifth round of talks on Nov. 17-21, which is later than originally anticipated as ministers give themselves more time between rounds to assess proposals.
The Mexican peso jumped more than 1 percent on news of the 2018 timeframe for talks, as investors bet it decreased the odds that the deal would fall apart any time soon. The Trump administration had previously set a goal of finishing negotiations as soon as this year.
But Mexico and Canada have repeatedly and publicly rejected the U.S. demands on dairy, autos, dispute panels, government procurement and a sunset clause.
President Donald Trump has called Nafta a disaster and repeatedly threatened to withdraw the U.S. from the agreement, a step the White House can set into motion by giving six-months’ notice to its trading partners. At stake is the $1.2 trillion in annual trade between the three countries, as well as the business models of companies such as Ford Motor Co. and General Motors Co. that have adapted their supply chains to take advantage of the trade zone.
Trump again decried “massive trade deficits” with trading partners, speaking at the White House on Tuesday.
“Companies are leaving and they’re firing the people and the product is made elsewhere and then it’s sold back into the United States,” he said. “I’m not going to be allowing that, so I can understand how certain countries and the leaders of certain countries may feel. But we’re just not going to allow the United States to be taken advantage of by other countries anymore.”
Copyright 2017, Bloomberg