After four rounds of negotiations, the United States, Canada and Mexico are beginning to express frustration concerning the discussions and proposals to revise and update the North American Free Trade Agreement (NAFTA). In an October 17 joint statement, the parties indicated that they have put forward “substantially all initial text proposals” but that these proposals have “created challenges” and highlighted “significant conceptual gaps” among the three countries.
Acknowledging that one of President Trump’s clear objectives is the reduction of the U.S. trade deficit with its NAFTA partners, U.S. Trade Representative Robert Lighthizer stated that he was “surprised and disappointed by the resistance to change from our negotiating partners.” In his closing remarks, Ambassador Lighthizer said, “As difficult as this has been, we have seen no indication that our partners are willing to make any changes that will result in a rebalancing and a reduction in these huge trade deficits. Now I understand that after many years of one-sided benefits, their companies have become reliant on special preferences and not just comparative advantage. Countries are reluctant to give up unfair advantage. But the President has been clear that if we are going to have an agreement going forward, it must be fair to American workers and businesses that employ our people at home.”
In response, Canadian Foreign Affairs Minister Chrystia Freeland called the U.S. list of proposals “unconventional” and “troubling,” stating that some of them would “turn back the clock on 23 years of predictability, openness and collaboration under NAFTA.”
Mexican Secretary of the Economy Ildefonso Guajardo Villarreal said, “We must ensure that decisions we make today do not come back to haunt us tomorrow,” adding that, in order for the negotiations to be fruitful, “we must understand that we all have limits.”
Mexico will host the fifth round of negotiations November 17-21, 2017, and the parties have agreed that additional rounds will be necessary and scheduled during the first quarter of 2018.