Freeland, Lighthizer and Guajardo: talks extended. Freeland, Lighthizer and Guajardo: talks extended.

Contentious issues push talks into 2018

Mexico, Canada reject US proposals at NAFTA talks; growing pessimism over prospects

Investor optimism over trade talks between Mexico, the United States and Canada gave the peso a boost today after an announcement that renegotiating NAFTA would extend into 2018.


But many observers are doubtful about the prospects for the 23-year-old North American Free Trade Agreement, according to several reports today.

As expected, Mexico and Canada have rejected contentious proposals by the U.S. that have created a grim and pessimistic mood during the latest session in Washington, reported the LA Times.

The proposals include a requirement for greater U.S. content in automotive manufacturing and a sunset clause that would terminate the agreement after five years if all three partners did not agree to renew it.

Trade analysts contacted by the Times said they expected most of the U.S. proposals would be formally rejected at the fifth round of talks, scheduled for November 17-21 in Mexico City, which could trigger an end to the entire process.

Ending the agreement has been a persistent threat by U.S. President Donald Trump, who last week expressed his preference for bilateral deals with Canada and Mexico.

At a press conference today in Washington, Economy Secretary Ildefonso Guajardo said there were limits to what Mexico could accept, while Canadian Foreign Minister Chrystia Freeland some some U.S. proposals were counter to World Trade Organization rules.


U.S. Trade Representative Robert Lighthizer said he was “surprised and disappointed” by the outcome so far.

However, all three reiterated their mandate to conclude talks in a reasonable period of time, although there had been hopes that an agreement would be reached by the end of this year.

The peso gained 1% on the news that they would move into 2018.

The additional rounds will give more time between the sessions for the evaluation of proposals, the parties to the negotiations said today in a prepared statement.

A former Canadian trade negotiator wrote today in The Globe and Mail newspaper that there will likely be a “U.S.-contrived failure” of the negotiations.

Andrei Sulzenko believes that Trump’s game plan has been to make outrageous demands that if accepted would mean a huge “America First” victory and if rejected would set up a failed negotiation, leading to bilateral talks.

Both would constitute a win for Trump, he wrote, although Mexico would not likely wish to pursue a bilateral agreement with the U.S.

In a presidential election year, “it would be politically toxic in Mexico to be seen re-engaging with a country that seemed to be negotiating in bad faith.”

Source: Bloomberg (en), Los Angeles Times (en), The Globe and Mail (en)

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  • Charliej

    No country will want to negotiate with the US as the Trump administration is completely untrustworthy. If the US withdraws from NAFTA, both Canada and Mexico will be hurt. But the US will hurt too. Projections are for almost a million US jobs to be lost. And the jobs lost will be mostly from Trump supporters. These people believed the orange bastard’s lies and now they will have to pay the price for his insanity.

    • Gary gimp

      “Projections are for almost a million US jobs to be lost.”

      The projections were completely wrong about Pres. Trump.

      • Charliej

        The projections were wrong because of all the low IQ voters. The projections about job losses don’t rely on stupid people to come to pass. Mexico is negotiating for a new source of grain with Argentina and Brazil. Mexico is negotiating a trade deal with China. The Mexican auto plants belonging to US automakers will be worth little if they can not import autos to the US. Trump has not thought of all of the things that can go wrong with his policies. Trump gets dumb ideas and the American people have to pay the price.

  • Gary gimp

    The reality is, that in the end, there will be some sort of agreement. This is all smoke and mirrors.

  • Mike S

    Trump crapped on the Paris Climate accords and began trying unsuccessfully to reinstate coal and defund incentives to jump-start green/clean/alternative energy & building and vehicle efficiency. The result will be a short-term gain and a long-term disaster as China & Europe dominate those industries & the coming 30 million jobs. America suddenly became an unreliable partner. Trump carrying water for Netanyahu is crapping on the Iran Nuclear Agreement driving a serious wedge between the US and its NATO allies. The US is becoming an unreliable ally that doesn’t honor agreements. Trump is crapping on NAFTA calling it the worst trade agreement in US history. Trump is an isolationist and white nationalist. The Trump economy with its tax cuts for the wealthy, big military spending, and mushrooming deficits during “good times”, will kick-in starting in 2018. By 2020 if he hasn’t been impeached, US economy may well look like 2008. Mexico will suffer too but not as much as the US.