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Abu Dhabi, UAEWednesday 14 November 2018

US and Mexico hope to reach new NAFTA accord next month

The new follows Wednesday’s ceasefire in trade hostilities between the United States and the European Union

The president-elect of Mexico, Andres Manuel Lopez Obrador (centre), will take over in December and has already held talks with Donald Trump. EPA/SASHENKA GUTIERREZ
The president-elect of Mexico, Andres Manuel Lopez Obrador (centre), will take over in December and has already held talks with Donald Trump. EPA/SASHENKA GUTIERREZ

US and Mexican officials said Thursday they are aiming to conclude talks to remake the North American Free Trade Agreement as soon as next month.

The new follows Wednesday’s ceasefire in trade hostilities between the United States and the European Union, raising the possibility president Donald Trump could declare victory in two fronts of his global trade offensive.

The US, Mexico and Canada could reach “some kind of conclusion during the course of August,” US trade representative Robert Lighthizer told a Senate subcommittee.

He said “that’s not an unreasonable timeframe if everybody wants to get it done,” adding that it would allow Mexico’s president Enrique Pena Nieto to sign the new deal before he leaves office December 1.

“That’s what our hope is,” Mr Lighthizer said.

Mexico’s economy minister Ildefonso Guajardo, in Washington for meetings with Mr Lighthizer, told reporters the sides were getting close, and had a “window of opportunity” to reach a deal by the end of August.

He said “that is the expectation we all have” and are committed to, although after the meeting he cautioned: “I cannot predict the end result.”

Jesus Seade, adviser to Mexican president-elect Andres Manuel Lopez Obrador, who takes office December 1, said the meeting was “excellent,” and he was “cautiously optimistic” on reaching a deal.

Talks are due to continue Friday.

But Mr Lighthizer suggested he still favored a so-called sunset clause in US trade agreements, requiring parties to renew them every five years.

US insistence on the sunset provision helped derail the NAFTA talks earlier this year after both Canadian and Mexican officials rejected it outright.

“I think we clearly should have a sunset review,” he said.

In a possible dig at Ottawa, Mr Lighthizer also said Mexican authorities had been more cooperative than the Canadians.

“My hope is that we will before long have a conclusion with respect to Mexico and as a result of that Canada will come in and begin to compromise,” he said.

“I don’t believe they’ve compromised in the same way the United States or Mexico has.”

Canadian authorities did not immediately respond to a request for comment from AFP on Thursday.

Canadian foreign minister Chrystia Freeland met Wednesday with her Mexican counterpart Luis Videgaray said there had been “significant progress” towards revamping the two-decade-old trilateral agreement.

Talks were first launched last year after Trump demanded an overhaul of the “terrible deal,” and he has threatened to pull out and then negotiate separate bilateral deals, most recently in a letter to Mr Lopez Obrador.

Mr Freeland stressed that NAFTA remains “a trilateral agreement and that’s a simple statement of the reality.”

Mr Lighthizer also faced stiff questioning from senators who were anxious to know how much longer Trump’s other trade confrontations would last.

Lawmakers in Mr Trump’s own Republican Party have denounced his large-scale campaign of tariffs since it began earlier this year, and companies have begun to feel the pain of rising prices and lost markets.

Senators expressed renewed concern for farmers and manufacturers suffering from the retaliation by US trading partners, as well as Alaskan fishers, Maine lobster producers and Tennessee auto workers.

“There clearly is pain associated with what we’re doing,” Mr Lighthizer acknowledged.

The agriculture department this week announced a plan to provide up $12 billion in aid to farmers affected by retaliatory tariffs.

Mr Lighthizer said it could take longer to resolve the concerns with China, which the US has accused of unfair trade practices and theft of American technology.

“If you look at NAFTA, I believe we’re very close,” he said, “but on the specific question of China, the reality is it’s going to take time.”

Treasury secretary Steven Mnuchin said US officials are willing to talk with Beijing “any time China is willing to seriously negotiate.”