Mexico and Canada are planning to revise lesser contentious chapters of the NAFTA trade deal with the United States , hoping to clear the path for a deal on the toughest issues before upcoming elections.
Ranging from calls for major changes to automotive content rules and dispute resolution mechanisms, to imposing a clause that could automatically kill NAFTA after five years, the chief stumbling blocks laid by the White House look unlikely to be removed in the latest Mexico City round, officials said.
Trump has said it many times that US would withdraw from NAFTA unless big changes are made to a pact he blames for U.S. manufacturing job losses.
“I think there’s going to be major progress on the technical issues and major obstacles on the critical issues,” Bosco de la Vega, head of the Mexico’s National Agricultural Council farm lobby, said of the talks running until March 5.
Under NAFTA, at least 62.5 percent of the net cost of a passenger car or light truck must originate in the region to avoid tariffs. Trump wants the threshold raised to 85 percent.
Mexican Economy Minister Ildefonso Guajardo has said his negotiating team aims to present a proposal on rules of origin, although he has not provided details.
Negotiators had wanted to wrap up talks by March to avoid them being politicized by Mexico’s July presidential election. U.S. congressional elections in November could also complicate the talks.
Canada is keen to stay in the pact but Canada’s chief negotiator, Steve Verheul, struck a downbeat tone last week, telling a business audience: “There are large gaps between what we’re trying to achieve and what the U.S. is trying to achieve.”