Have NAFTA Talks Reached A Breaking Point?


Nathaniel Parish Flannery, Contributor, Forbes

Nov 30, 2017


As efforts re-negotiate the North American Free Trade Agreement (NAFTA) continue, the U.S. team continues to push a hardline stance that the governments of Canada and Mexico aren't going to accept. Right now it seems like very little progress is being made. On November 29 Mexico's Minister of Economy Ildefonso Guajardo exited a meeting with Trump's team in Washington with a negative outlook. “I was clear that the domestic content [proposal] is something that is not viable at this point,” Guajardo said.


The U.S. appears to be adamant that it will squeeze concessions out of Mexico and Canada and deliver a win for Donald Trump's administration. So far Trump's team is ignoring criticism from business groups in the U.S. that have warned about the potentially disastrous consequences of the U.S.'s current proposals.


In a statement U.S. Trade Representative Robert Lighthizer said, “While we have made progress on some of our efforts to modernize NAFTA, I remain concerned about the lack of headway. 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."


Representatives from Canada and Mexico, however, aren't yet willing to seriously discuss the U.S.'s controversial proposals for new rules for increasing the U.S. content on cars produced under the NAFTA framework or a so-called sunset provision that would require the three countries to re-affirm their commitment to NAFTA every five years. One Canadian official explained, “On the controversial proposals, we cannot really negotiate as there seems to be little room to do so and little logic to the proposals.”


Trump's team appears to be threatening to be ready to cancel NAFTA if serious concessions aren't made. Mexico and Canada, however, are willing to stall and wait for Congress and U.S. business chambers to increase the pressure on the Trump administration to preserve the current framework. Right now it's still not clear if Trump really is willing to walk away from NAFTA and risk losing up to $12.8 billion in yearly exports to Mexico...