[CTC] Several on NAFTA negotiations

Fri Aug 3 07:25:51 PDT 2018

Three articles below...

https://www.wsj.com/articles/u-s-mexico-pursue-nafta-auto-deal-as-canada-sits-on-sidelines-1533241721?mod=searchresults&page=1&pos=1 <https://www.wsj.com/articles/u-s-mexico-pursue-nafta-auto-deal-as-canada-sits-on-sidelines-1533241721?mod=searchresults&page=1&pos=1>

U.S., Mexico Pursue Nafta Auto Deal as Canada Sits on Sidelines

By William Mauldin and Robbie Whelan  
Aug. 2, 2018

Senior U.S. and Mexican officials on Thursday sought to hammer out new rules for the auto trade at the center of negotiations to overhaul the North American Free Trade Agreement, while Canadian officials sat out the latest talks amid persistent tension between Ottawa and Washington.

The talks with Mexico are part of the Trump administration’s effort, not only to boost exports and narrow the trade deficit, but to chalk up victories that might justify the president’s confrontational approach to trade. The administration also wants to enlist at least the tacit support of traditional allies—including Nafta members Mexico and Canada—in an increasingly tense standoff with China over trade issues.

Should Mexico and the U.S. reach an accord on autos, an important sector covered by Nafta, it could lead to a broader deal to revamp the pact for all three of its members, officials say. President Trump is seeking to remake the 24-year-old agreement in ways that favor American manufacturing workers but has hit resistance from the other countries, business groups and lawmakers that back free trade.

The election last month of Andrés Manuel López Obrador as Mexico’s next president has created an incentive of sorts. The talks have dragged on and blown through several deadlines, and officials are now seeking to get some sort of agreement by late August, which would allow a deal to be signed formally before Mr. López Obrador takes office in December.

U.S. trade representative Robert Lighthizer wants to tighten the rules for auto trade to ensure cars traded duty free in North America have less content from outside the continent. He is also working with Mexico on new rules that would require a certain proportion of a car—up to two-fifths—to be produced by workers earning up to $16 an hour, according to people familiar with the proposal, which hasn’t been released publicly.

“I am confident that we can do what we have to do, which is to move quickly,” said Jesús Seade, Mr. López Obrador’s senior trade and economic adviser. Mr. Seade said cars are a “central part” of the current discussions, which are covering Nafta “from A to Z, and everything in between.”

Moisés Kalach, a director of the private-sector board that advises Mexico’s government on Nafta, said Wednesday that the U.S.-Mexico talks on autos are now more on the technical side, since Mexico in May agreed to the U.S. idea of including a wage component.

Mr. Kalach said that a deal in principle is possible by mid-to-late August—which would allow for a new agreement to be signed before Mr. López Obrador takes office—as long as the U.S. side demonstrates a willingness to show flexibility on key issues.

“Up until today, we have not seen flexibility at the negotiating table” on the part the U.S. team on the issues of high-wage zone content requirements or on the “toxic issues” of a proposed five-year sunset clause and the proposed elimination of investor arbitration panels, he said.

More flexibility on the issue of auto content rules comes as a result of Mr. Trump’s escalation of trade tensions with Europe in late June, when he announced an investigation that could allow the U.S. to impose 20% tariffs on imports of European cars. Last month, Mr. Trump agreed with European Commission President Jean-Claude Juncker to suspend auto tariffs as part of an accord to seek a solution to the trade tensions with the EU.

Getting a deal done on Nafta has become crucial to European auto makers such as BMW and Volkswagen, which have major manufacturing operations in Mexico and the U.S. These car makers increasingly see North America as a “safe haven” region in the event that Mr. Trump’s threatened tariffs hurt their business in Europe, Mr. Kalach said.

Mr. Kalach also played down tensions between the U.S. and Canada. Canadian Foreign Minister Chrystia Freeland last week traveled to Mexico City to renew contact with the Mexican negotiating team, which now includes a representative of Mr. López Obrador, the president-elect.

“We’ll be back to the table reasonably shortly, like within the next two weeks,” said Canada’s ambassador to the U.S., David MacNaughton, in an interview. “If it is the case that the Mexicans and the Americans are really close, and that they manage to get those issues resolved in the next few days, then I think we’ll be back to the table sooner rather than later.”

Ms. Freeland said she has also spoken in recent weeks to Mr. Lighthizer, adding it is her preference to see the Nafta talks move into a higher gear with the Mexican elections out of the way. “We certainly are committed to moving forward as quickly as we can,” she said.

The Trump administration imposed steel and aluminum tariffs on Canada and Mexico and has also greenlighted other tariffs on Canada, raising tensions between the two countries. On Tuesday the Commerce Department set final tariffs on so-called uncoated groundwood paper from Canada, widely used for printing American newspapers, and a U.S. commission may green light final duties on the imported newsprint next month.

Tensions with Canada reached the highest political level in early July, when Mr. Trump attacked Canadian Prime Minister Justin Trudeau on Twitter following the Group of Seven meeting Mr. Trudeau hosted in Canada.

Washington’s tough stance against Ottawa is worrying lawmakers who are seeking to ensure that Nafta remains a trilateral agreement among all three countries. Rep. Ron Kind of Wisconsin and several other Democratic lawmakers from states bordering Canada this week wrote to Mr. Lighthizer, saying the administration doesn’t have authorization from Congress to strike separate bilateral deals with Mexico and Canada.

“Nafta is a trilateral agreement,” Mexican Economy Minister Ildefonso Guajardo told reporters Thursday in Washington. “There have been very clear statements by members of Congress.”

—Paul Vieira in Ottawa contributed to this article.

INSIDE US TRADE

Guajardo claims progress in NAFTA talks after meeting with Lighthizer

August 02, 2018 

The U.S. and Mexico have made “very good advancement” on a modernized North American Free Trade Agreement this week, Mexican Economy Minister Ildefonso Guajardo said on Thursday, adding that roughly 20 “items” had been “worked through.”

He named one of those items as the environment, saying the two sides were “very much aligned in this chapter.”

“But there [are] a lot of things,” Guajardo told reporters on Thursday outside of the Office of the U.S. Trade Representative. “At least 20 items that have been worked through. And that is very good advancement.”

Guajardo met with USTR Robert Lighthizer for bilateral meetings on Thursday and will meet with the USTR again on Friday. The officials also met last week, when Guajardo told reporters that nine chapters had been closed and 10 were almost complete. Negotiators must agree on approximately 30 chapters.

“The teams have been engaging very specifically on a big set of items,” he said on Aug. 2. “A lot of issues are basically Mexico-U.S. issues and some other issues will require trilateral discussion at some point.”

One source close to the talks said Mexico and the U.S. this week had made significant progress on “some of the thorniest issues that have been at the table.” Technical teams from both sides have been meeting in Washington, DC, since Tuesday.

Chrystia Freeland, Canada’s minister of foreign affairs, did not attend this week’s NAFTA meetings.

Guajardo said this week would be dedicated to resolving issues between Washington and Mexico City, but added that Canada could be brought in for high-level talks as soon as next week.

Before meeting with Lighthizer on Thursday, Guajardo said any push by the U.S. to strike bilateral deals with Canada and Mexico would only “lengthen the process” outlined in U.S. Trade Promotion Authority law.

“NAFTA is a trilateral agreement,” he said. “I think there have been very clear statements from members of Congress that by any chance the U.S. wants to go bilateral, the requirements of the Trade Promotion Authority will lengthen that process.”

Guajardo emphasized that this week's meetings involved discussions of “all of the items” central to the deal and said an agreement on auto rules of origin was only a top priority “depending on which perspective you look at it.”

Flexibility, Guajardo added, must be a part of the talks for “everybody in order to find landing zones.”

A U.S. push for a sunset provision, which has been staunchly opposed by Canada, Mexico and most of the business community, had not been addressed during the past two weeks, he added.

“I have to be very frank with you. We have been here discussing many items in two weeks so far and we have not even touched the concept of sunset,” Guajardo said. -- Isabelle Hoagland (ihoagland at iwpnews.com <mailto:ihoagland at iwpnews.com>)

PoliticoPro
Guajardo: U.S., Mexican negotiators working on three-way NAFTA solution

By SABRINA RODRIGUEZ  
August 2, 2018

Negotiators from the U.S. and Mexico remain focused on creating a three-way solution that would include Canada in the wrap up to the NAFTA talks, Mexican Economy Minister Ildefonso Guajardo said Thursday.

“We are advancing toward something that we hope definitely can assure a trilateral agreement,” Guajardo said before he met with U.S. Trade Representative Robert Lighthizer. 

Guajardo’s comments came during the start of two days of high-level NAFTA talks between the U.S. and Mexican negotiating teams. The bilateral meetings in Washington mark the second week of talks where Canadian Foreign Minister Chrystia Freeland is not present.

However, Guajardo noted that he spoke with Freeland over the weekend.

While Guajardo emphasized that NAFTA is a trilateral deal, he did note that if the Trump administration presses to split up the pact and pursue a bilateral deal with Mexico, it could take much longer to wrap up talks.

Members of Congress have said “if by any chance the U.S. wants to go bilateral, the requirements of the Trade Promotion Authority will lengthen the whole process, so we are in dialogues,” Guajardo told reporters.

The visit also comes as the two sides are nearing the final stages of an agreement on automotive rules of origin, as Morning Trade <https://subscriber.politicopro.com/newsletters/morning-trade/2018/07/us-mexico-near-an-autos-deal-in-nafta-300159> reported on Monday. Technical negotiators have been meeting since Tuesday in hopes of wrapping up the remaining chapters.

“We are working on a full agreement and you know that means that either everything falls into place or nothing falls into place,” Guajardo said. 

Guajardo was accompanied by Mexican Foreign Minister Luis Videgaray, Mexican Ambassador Gerónimo Gutiérrez, Mexican Trade Undersecretary Juan Carlos Baker and Jesús Seade, a former WTO official and Mexican President-elect Andrés Manuel López Obrador’s pick as chief NAFTA negotiator. White House senior adviser Jared Kushner also attended the meeting.

“We can do what we have to do, which is to move quickly,” Seade said.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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