US-Mexico sort-out negotiations of 24-year-old deal that might have accidently left out tough issues

File photo: US-Mexico Flags/Getty

In the midst of the hurricane that is the trade war with China, the United States has sought to revamp the North American Free Trade Agreement – or what is more popularly known as NAFTA – with Mexico. This newly restructured agreement aims to cover all outstanding issues in the negotiations between the two countries.

Ildefonso Guajardo, the Economy Minister of Mexico, said on Thursday that about twenty topics managed to get agreed upon by both sides. However, he also mentioned that some of the biggest issues were yet to be solved. Guajardo had a meeting with US Trade Representative Robert Lighthizer on Thursday to focus on sticking points around autos and possibly wage hikes. After leaving the meet, he revealed that the ‘sunset clause’ was yet to be discussed. This clause is a provision sought by America which would ensure renegotiation of the agreement after every five years. Nevertheless, he seemed satisfied with the group’s progress so far. Before the meeting, however, he told reporters that “everything will fall into place or nothing will fall into place”.

This issue has been dragging on for the past year, ever since US President Donald Trump said he was “aiming for a better deal where US businesses and workers were concerned”.  Many issues have been raised about Trump’s confrontational approach to trade, and these talks with Mexico might be a way of becoming victorious to justify Trump’s actions, while at the same time boosting exports and reducing the trade deficit. Moreover, the support from their traditional allies – which includes members of NAFTA, namely Canada and Mexico – will ensure some form of clarity in the otherwise tense trade war. Canada’s foreign minister Chrystia Freeland was being informed on the progress of discussions with the United States by Mr Guajardo.

The most important talks to go over, however, are finalizing deals on the auto sector rules. Should that reach an accord, it would be beneficial for all three countries. Trump has hit resistance in spite of seeking to remake the 24-year-old agreement in favour of US workers. Guajardo had said to reporters at the U.S. trade representative office in Washington that there will not be a deal on controversial auto sector rules until all NAFTA issues are resolved. Last month’s Presidential elections declared Andres Manuel Lopez Obrador as the leader of Mexico and that ought to boost this deal. Officials are trying to get an agreement on these issues by late-August so that the deal is signed formally before Obrador sits in the office. Jesus Seade, the chief NAFTA negotiator for Mexico’s President-elect, said Thursday’s meeting would cover “A to the Z and everything in between.” He went on to add that he “felt confident that negotiators would be able to reach agreements if they moved quickly, but said that auto sector rules were a “central part” of a deal”.

Lori Wallach, head of Public Citizen’s Global Trade Watch division, a Washington-based public advocacy group, said the views of the United States and Mexico were converging on NAFTA policy, in large part because Lopez Obrador’s team had been backing the U.S. objective to raise wages for automotive workers. She suggested negotiators for the United States and Mexico would near an agreement in principle and say to Canada: “Come on in the pool, the water’s fine. We’re almost there, come to make it tri-national with us.'”

US-Mexican delegations will meet again on Saturday (their Friday) to go ahead with remaining negotiations.

 

 

*Neha Hardikar is a Research Intern at The Kootneeti

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