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News > Latin America

NAFTA Talks Extend Into 2018 Amid Deadlock

  • A sign on the U.S.-Mexico border.

    A sign on the U.S.-Mexico border. | Photo: Reuters

Published 17 October 2017

The next round of talks will take place in November in Mexico.

Trilateral talks over the North American Free Trade Agreement, or NAFTA, have been extended into the early months of 2018 amid deadlock, Bloomberg reported.

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Leaders from Canada, Mexico and the United States met today in the fourth round of negotiations in Washington. 

Talks were headed up by Canada's Minister of Foreign Affairs Chrystia Freeland, Mexico's Secretary of Economy Ildefonso Guajardo Villarreal and U.S. Trade Representative Robert E. Lighthizer.

Discussions remained tense as the U.S. government insists on several big changes to the 23-year-old deal that could hurt Canada and Mexico. As it stands, 62.5 percent of all cars produced within NAFTA countries must originate within the region. Lighthizer insisted that 50 percent of all car parts originate from the United States and 85 percent within North America.

Among other demands, he also wants the trade agreement renogiated every five years to allow U.S. companies access to independent arbitration if companies in another country violate the deal. Right now, this right is reserved for Mexico and Canada.  

U.S. negotiators insisted that Canada lift all tariffs on its dairy and poultry products over a 10-year period, an issue Canadian Prime Minister Justin Trudeau has said will not happen. Leaders are agreeing to add in protections on e-commerce trade between the countries.

Vanessa Rubio, Mexico's deputy finance minister, took the tensions in stride saying, “we're in the normal process of a free trade negotiation."

This year’s NAFTA re-negotiations stem from U.S. President Donald Trump’s insistence that the agreement be remodeled lest the U.S. leave the deal entirely. His administration believes that its proposals will protect U.S. businesses, mainly manufacturing, and will decrease the U.S. trade deficits with Mexico and Canada. 

U.S. Chamber of Commerce President Tom Donohue said in a speech recently that the Trump administration’s proposals are "unnecessary and unacceptable."

Talk of tense NAFTA negotiations triggered the Mexican peso value to hit a five-month low.

Experts aren’t convinced the United States has suffered the brunt of NAFTA. Since it was implemented, Mexico’s unemployment has risen and the deal put about two million small-scale Mexican farmers out of business, forcing many of them to migrate to the United States looking for work.

The next round of talks will take place in November in Mexico.

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