North America: Trade Talks Will Progress, Tepidly

A glimmer of optimism is emerging at NAFTA talks, with the countries starting to engage on hard topics after months marked by finger-pointing, recriminations and threats of a US withdrawal.

He also repeated his position that he may terminate the North American Free Trade Agreement (NAFTA) if the US could not reach what he calls a better deal.

The U.S. delegation has just under a month to more closely consider the Canadian proposals before the three parties meet again in Mexico City on February 26. Under the Canadian proposal, backed by Mexico, the USA would be prevented from participating in or developing the rules of the new system: “We basically said to them, ‘If you want to opt out that’s fine, you’re gone, “‘ one non-American said.

The first (Scenario A) assumes that the USA imposes duties in line with World Trade Organization obligations under “most-favored nation” status.

Both Canada and Mexico are invested in keeping NAFTA alive, especially Mexico, which stands to lose the most if the deal collapses. The agreement is now on shaky ground as President Donald Trump keeps threatening to pull the USA from the deal if he can’t get his way.

“I don’t think the president’s views have changed at all”.

“When I sat down with Vice President Pence about a month ago”, he said, “I said if we lose NAFTA, not only are we going to lose farmers, you might as well roll up rural, downtown western Kansas”.

Freeland and Mexican Economy Minister Ildefonso Guajardo gave their own signals of cautious optimism during a Davos panel discussion. It’s not that I don’t want to go back because I do love Juárez, but we came here with my dad’s effort and that one chance to live the American dream. The United States has asked for a sunset clause, which would require that NAFTA be renegotiated every five years.

Canada also suggested an overhaul of the investor-state dispute system under Chapter 11.

“We’re hoping for the end of March to have a statement of principles that allows the president to say ‘I have Canada and Mexico over a barrel, I just need more time, ‘” said Dan Ujczo, a trade attorney with Dickinson Wright.

Conducted by research firm The Trade Partnership LLC, the study looked at two scenarios in which talks end with no deal and NAFTA is dissolved.

All three sides agreed to language governing anti-corruption during the latest round, while making progress on customs and food sanitation issues. That followed agreements in previous rounds on small- and medium-sized businesses and competition.

Earlier this month, Canada filed a wide-ranging complaint with the World Trade Organisation that charged the United States with violating worldwide trade rules in its investigation of subsidies and other questions.

But on the divisive issues, including auto manufacturing, there is no sign of compromise. While conservatives and progressives alike have pointed to NAFTA’s flaws, the deal remains a sweeping agreement binding the three North American countries together.

“Some real headway was made here today”, Lighthizer said. Freeland praised the work of negotiators.

Several people gathered in Montreal said they saw things moving in a positive direction.

Baucus said Trump doesn’t know a lot about trade, government or other countries, and needs to be educated “on what makes sense for the country”.

“We are known as global leaders”, Gov. Asa Hutchinson said at a meeting on NAFTA and Arkansas earlier this month at the Trade Center.

Mr. Guajardo, the Mexican minister, optimistically stated that the talks put the three countries on “the right track to create landing zones” for an agreement, whatever that is.

Trump Offers Rare Glimpse of Hope on Nafta