Few Signs of Progress in NAFTA Talks

Negotiations in Mexico to update NAFTA have not made much progress on tough US demands that could sink the 1994 trade pact, but the current round of talks are progressing with civility, participants said on Saturday.

Officials from the US, Canada and Mexico are meeting in Mexico City for the fifth of seven planned rounds to update the North American Free Trade Agreement, from which US President Donald Trump has threatened to withdraw, Reuters reported.

Time is running short to seal a deal by the deadline of end-March 2018. Officials say next year’s Mexican presidential election means talks after that date will not be possible.

The US administration has made demands that the other members say are unacceptable, such as a five-year “sunset” clause and tightening so-called rules of origin to boost the North American content of autos.

“It is very slow moving but there are no fireworks,” said a Canadian source with knowledge of the talks, adding there had “not been much conversation at all” on the more contentious US proposals.

Within hours of the latest round of talks formally starting on Friday, Canada was complaining about inflexibility by the US.

Officials have so far discussed other issues such as labor, gender, intellectual property, energy and telecommunications but it is too soon to say whether there will be any breakthroughs this round, added a source familiar with the talks.

“The work is moving forward,” Mexican deputy economy minister Juan Carlos Baker told reporters, adding that the three countries had prioritized technical work in Mexico City. But he said negotiators were aware that much work lay ahead and “we have to double our efforts.” “The atmosphere is good, the atmosphere is one of work,” Baker added.

Mexican officials hope chapters on telecommunications and e-commerce will be concluded by the end of business on Tuesday, but there has been no indication of this yet.

Although negotiators are scheduled to discuss rules of origin every day, the source said detailed talks on boosting North American content would not be held before the end of the round on Tuesday.

Canada and Mexico say the new rules of origin are unworkable and would damage the highly-integrated auto industry.