By Andrew Mayeda
The U.S., Mexico and Canada are heading into 2018 with no clear plan for saving the North American Free Trade Agreement.
Negotiators wrapped up their latest round of talks last week in Washington without closing any new chapters of a revamped accord. While officials made headway on issues such as telecommunications and e-commerce this week, according to people familiar with the talks, the parties haven’t finalized agreements on even minor issues since October. The lack of progress makes the goal of reaching a deal by March seem increasingly unrealistic.
“People have to be planning for what they do in a worst-case scenario,” said Robert Holleyman, a partner at Crowell & Moring who served as deputy U.S. Trade Representative under Barack Obama. “At the same time, I’ve never seen industry more involved across all sectors in making the case that the U.S. needs to come out with a Nafta that allows all three countries to declare victory.”
Only two chapters are completed out of a new deal that’s expected to include nearly 30. The three nations had already punted discussion of tough issues such as regional-content requirements for cars to qualify for Nafta’s benefits and investor-state dispute systems, where U.S. proposals have been described as unworkable by Canada and Mexico.
Narrowing Gaps
This week’s round focused on narrowing gaps in chapters where previous progress had been made, said Amelia Breinig, spokesperson for the U.S. Trade Representative’s office. Negotiators “substantively” completed an annex on energy-efficiency standards, she said in an email.
“The United States continues to look for serious engagement and meaningful progress in these talks for a modernized and rebalanced Nafta,” Breinig said.
With a general election in Mexico and a U.S. congressional vote next year, time is running out to salvage the 23-year-old accord, which governs more than $1 trillion in trade. President Donald Trump has threatened to pull out of the deal if a new pact doesn’t favor the U.S. The next round of talks in Montreal from Jan. 23-28 is looming as a key moment.
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