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NAFTA Negotiations May End Soon

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Important decisions about NAFTA’s future are now in the hands of the Trump administration, as American negotiators turn to their political masters for guidance with a potentially pivotal round of talks set to conclude today.

This story by the Canadian Press appeared in Automotive News Canada.

After major discussions about autos, dispute resolution and a five-year review clause, which some hailed as the first signs of true bargaining on difficult issues, American negotiators have asked political decision-makers how to respond.

The politicians leading the process for all three countries will be in Montreal to close the round, hold meetings, and make public statements Monday. This follows a round that featured hours of back-and-forth dialogue on autos and other major sticking points.

Earlier rounds had seen scant engagement on the most serious files — with the U.S. dropping proposals that shocked the other countries, and the other countries insulting the American ideas and devoting one round to describing reasons their proposal on cars was so impractical.

On autos, the Canadians suggested new ways to calculate whether a car counts as American. The new formulas being proposed would inflate U.S. numbers somewhat by including areas where the U.S. dominates, such as intellectual property and research.

A Canadian counter-proposal, developed with Mexico, would prevent the U.S. from participating in or developing rules for the new system: On the review clause, the U.S. has proposed a rule that would terminate NAFTA every five years unless it’s maintained by all three countries. Mexico responded a few months ago by proposing a watered-down version, which would force countries to periodically review the effects of the agreement, but drop the automatic-termination rule.

Canada has signed on to the Mexican approach, and proposed ways it might work. One involves tasking NAFTA’s central body, the Free Trade Commission, with conducting regular progress reports.

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