Contentious NAFTA Talks Will Continue into 2018

Efforts to revamp the 23-year-old North American Free Trade Agreement have stalled over increasingly blunt criticisms on all sides.

Canada, Mexico and the U.S. make it clear after four rounds of talks that they are far apart on key changes demanded by the U.S. But they have agreed to extend their self-imposed year-end deadline for updating NAFTA into the first quarter of 2018.

Sticking points—all of them raised by U.S. proposals—would raise local content requirements, scrap a NAFTA system for resolving unfair trade complaints and implement further reviews of the agreement every five years.

Canadian Foreign Affairs Minister Chrystia Freeland complains of “troubling” U.S. proposals that sometimes violate World Trade Organization rules. She accuses the U.S. of a “winner-take-all” position that, if implemented, would disrupt the region’s auto industry supply chains and hurt North America’s competitiveness in the global marketplace.

Mexico’s Economy Secretary Ildefonso Guajardo says the U.S. goal of trying to repatriate jobs from Mexico is a “waste of time.” He suggests the future of the hourly workforce in the region would be better addressed by a tri-country effort to deal with the impact of automation.

U.S. Trade Representative Robert Lighthizer retorts that Canada and Mexico have been unwilling to make any changes that would rebalance their trade surpluses with the U.S. He says the U.S. cannot continue to support policies that encourage its own companies to invest in Canada and Mexico so they can ship goods back to the U.S.

NAFTA has given the two countries “years of one-sided benefits” and made them reliant on special preferences rather than their own competitiveness, Lighthizer declares. He adds that “All parties must understand this and be reasonable if there is any chance for these negotiations to be successful.”