The fifth round of trilateral negotiations for the North American Free Trade Agreement concluded on Tuesday, Nov. 21. Results were either good or bad, depending on whether you are pro- or anti-NAFTA.
Nearly 30 negotiating groups gathered together in Mexico City the past seven days, all hoping to close large gaps created by tough demands from the United States. This time around, the three NAFTA ministers agreed to step back to provide negotiators with more time to analyze proposals and conduct internal consultations.
A trilateral statement suggests some “progress was made in a number of chapters.” However, a statement from U.S. Trade Representative Robert Lighthizer was less sugar-coated.
“While we have made progress on some of our efforts to modernize NAFTA, I remain concerned about the lack of headway,” Lighthizer said in a statement. “Thus far, we have seen no evidence that Canada or Mexico are willing to seriously engage on provisions that will lead to a rebalanced agreement. Absent rebalancing, we will not reach a satisfactory result.”
Since negotiations are taking place behind closed doors, details on any progress are unknown as of press time. One of the biggest hurdles U.S. negotiators faced was convincing Canada and Mexico to agree to proposed new rules of origin.
Currently, 62.5 percent of parts in auto production must come from North American factories. USTR wants to increase that to 85 percent. Furthermore, USTR wants a new provision that will require 50 percent of a vehicle be manufactured in the Unites States. Car manufactures are opposed to the latter proposal, citing increased costs and decreased global competitiveness.
More than 70 lawmakers in the House of Representatives signed a letter to Lighthizer urging him to reconsider about the proposed rules of origin. Lawmakers are concerned that certain proposals by the Trump administration “would eliminate the competitive advantages provided to the U.S. auto industry under the current NAFTA rules.” Lawmakers also are worried that such proposals could be rejected by Canada and Mexico, potentially ending the agreement altogether.
Mexico’s Ministry of Economy issued a news release with details regarding progress of Round 5.
“Although no chapter was closed, substantial progress was made in anticorruption, telecommunications, good regulatory practices, sanitary and phytosanitary measures, trade facilitation, electronic commerce, technical barriers to trade and in various sectoral annexes,” according to the Ministry of Economy statement.
Round 6 of negotiations is scheduled to take place on Jan. 23-28 in Montreal, Canada. In the meantime, negotiators will continue their work in intersessional meetings in Washington, D.C.
Copyright © OOIDA