Sun, Apr 08, 2018 - Page 16 News List

NAFTA talks ‘making progress’

STUMBLING BLOCK:The Canadian minister of foreign affairs said that requirements for US content in vehicles is one of the most complex issues they are dealing with


Canadian Minister of Foreign Affairs Chrystia Freeland on Friday said officials are making progress in intensive talks to revamp the 24-year-old North American Free Trade Agreement (NAFTA) with the US and Mexico.

Freeland met over two days in Washington with US Trade Representative Robert Lighthizer, who described the talks as “positive,” and Mexican Secretary of Economy Ildefonso Guajardo to try to reach an agreement on a new NAFTA.

The discussions have entered “a new, more intensive phase of engagement,” Freeland said in a Canadian television interview.

“The tone is positive. We are making progress and we’re just all very committed to working as hard as we can to get a good deal, a win-win-win,” she said.

Freeland said talks would continue and she would stay on in Washington “a little while longer.”

“The bottom line is we had two days of intensive and constructive and productive work,” she said.

US President Donald Trump’s administration is increasing pressure in the hopes of quickly reaching a deal. Looming on the horizon are July’s presidential elections in Mexico and November’s midterm US congressional elections.

The sides are reportedly aiming to have a deal in principle finished before next week’s Summit of the Americas in Peru.

The White House is also contending with increasing public fears of an all-out trade war with China, amid escalating tariff threats that sent global markets lower and Wall Street tumbling two percent on Friday, for a loss of nearly 10 percent since the peak in late January.

Lighthizer later issued an optimistic statement.

“We had positive meetings this week among ministers and staff,” he said. “We are in continuous contact during these negotiations and we will continue working to achieve an agreement that benefits our three countries.”

Freeland noted there has been progress in the past few weeks on requirements for US content in automobiles, which she said was one of the most complex issues for all three countries.

However, she declined to provide details on any other areas under discussion.

Under the agreement, 62.5 percent of the content of a vehicle must be produced within the NAFTA countries to move across borders and remain duty-free.

Washington wants to bump this requirement up to 85 percent, with 50 percent of US origin — a proposal that Ottawa and Mexico City have both rejected.

Several other stumbling blocks remain to be resolved, particularly Washington’s proposals to include a “sunset clause” for the agreement and to modify a key dispute resolution mechanism.

Mexico, meanwhile, is reportedly holding out against a US demand that would require automakers to source auto parts from factories that pay workers at least US$15 per hour — in line with US and Canadian wages, versus Mexico’s average wage of US$3 per hour.

The auto parts sector is concerned that higher wages could increase costs throughout the supply chain, leading to higher prices for vehicles or a shift in work to lower-wage jurisdictions outside of North America.

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