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What’s up with NAFTA?

20 November 2017

Apparently, not a lot. Mexican (and Canadian) proposals are being shunted aside, although so far, negotiators have avoided getting bogged down in politics.

EU deja sin respuesta propuestas mexicanas sobre TLCAN (Susana González G., La Jornada, 20 November 2017)… my translation

The United States has not responded, and has been unwilling to respond to counter-proposals presented by Mexico in the fifth round of the renegotiation of the North American Free Trade Agreement (NAFTA). In particular, the United States negotiators have no response to Mexican proposals for a regular review and revision of the treaty every five years, according to Moisés Kalach, coordinator of the Strategic Consultative Council of International Negotiations (CCENI).

“The Mexican team is putting forth proposals and counter- proposals, but the United States is not responding. There are some chapters where apparently there had been progres, but we have not seen any willingness [to discuss the matter] on the part of the American team. That is one of the important things that the Mexican team reports to us, “he said.

On the eve of the conclusion of the fifth round, Kalach said that three chapters could be closed, those related to telecommunications, regulatory improvement and sanitary and phytosanitary measures.

With two outstanding issues – those related to automotive content and the U.S. trade deficit – there is strong disagreement. There is no counter-proposal” on the part of Mexico, because the Mexican automotive industry considers it unacceptable to increase the U.S. content [on automobiles sold in the United States] to 50 percent, so [the negotiators] can only continue to exchange information for analysis.

“As of today there is no possibility of changing or moving the rules of origin in the automotive sector,” he said, nor can the United States proposal to have agricultural products regulated by the seasonal calendar of the United States acceptable. “It simply can not be done,” he remarked.
Matches between Canada and Mexico

He said that for the time being, two more rounds are foreseen for the renegotiation: in December in the United States and in January in Canada, but these rounds will need to be ratified by ministries in all three countries. .
He stressed that the proposal to build in a “setset clause”, which would imply a “sudden death” to the treaty, as was proposed by the United States was rejected by both Mexican and Canadian negotiators.

The chapter relating to energy production has also found agreement between the Mexicans and Canadians, although when it comes to labor issues, the agreement is not on wage levels but on labor standards.

Even so, the businessman said that the process “is flowing relatively well” and attributed it to the fact that negotiations have been at a technical level and, therefore, “has been less politicized”.

The Mexican business sector remains calm, Kalach said, because Donald Trump has been occupied with discussions of domestic tax reform, taking the political pressure off the NAFTA negotiating teams.

Nonetheless, Kalach maintained that there is always the risk of obstructions in the negotiations or that the whole treaty will be scrapped. On the other hand, he points to continued support for NAFTA on the part of businessmen and legislators of that United States, even within Trump’s Republican Party.
While the proposals, he said, have turned out to be much more complex and may perhaps require an intermediate or mini-rounds of talks, it is difficult to determine if the renegotiation will end before March. “It is difficult to speculate”, he said, “the important thing being quality, not speed, even if it was initially believed that a rapid process was possible”.

Kalach explained that if there is no progress on the technical issues, then the heads of the negotiating teams will intervene, bumping up the talks to the ministerial level.

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