Trade negotiators from Canada, the US and Mexico on Friday presented more proposals for a renewed North American Free Trade Agreement (NAFTA) and tried to put behind them threats from US President Donald Trump to pull out of the treaty.
Teams from the three countries began a second round of talks in Mexico City on 25 areas of closed-door discussion, with subjects such as digital commerce and small businesses seen as areas where consensus was possible, officials said.
The teams did not debate details, according to officials, but one union leader present said that US Commerce Secretary Wilbur Ross had indicated he favored North American content of more than 70 percent in autos built within NAFTA.
Taking up where they left off in Washington talks two weeks ago, the delegations were showing each other proposed language for reworking the accord, without yet seeking to thrash out mutually acceptable compromises, officials present told reporters.
Away from the diplomatic noise, the Mexico talks are expected to help define the priorities of each nation rather than yield major advances.
The talks from Friday last week to Tuesday are to touch on some thorny topics, such as rules governing local content in products made in North America, Mexico’s economy ministry said in a statement.
Substantial discussion of such areas is unlikely in either this round or the next one, a source familiar with the process said.
“We do not expect any major breakthroughs or major developments in this round. We really don’t,” one official familiar with the negotiating process said.
Mexican officials believe Trump wants to include rules that a certain amount of content must be made in the US.
Jerry Dias, the head of Unifor, Canada’s largest private sector union, told reporters he had suggested in a recent meeting with US Commerce Secretary Ross that the NAFTA content level for autos be raised to 70 percent from the current 62.5 percent.
However, he said Ross had proposed a “more aggressive” level.
Hundreds of small farmers and union members including speakers from Canada gathered outside the Mexican Congress on Friday to demand that NAFTA be reworked to truly help workers.
Trump and Canadian Prime Minister Justin Trudeau on Thursday spoke by phone and stressed they wanted to reach a NAFTA deal by the end of this year, the White House said.
An accord by year end that significantly changes NAFTA is seen as unlikely.
NAFTA, first implemented in 1994, eliminates most tariffs on trade between the US, Canada and Mexico.
Critics say it has drawn jobs from the US and Canada to Mexico, where workers are paid far lower wages.
Supporters say it has created US jobs and that the loss of manufacturing in the US has more to do with China than Mexico.
If NAFTA collapses, costs could rise for hundreds of billions of dollars of trade as tariffs are brought back.
Free-trade lobby groups say consumers would be saddled with higher prices and less availability of products ranging from avocadoes and berries to heavy trucks.
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