Published: Mon, August 27, 2018
Worldwide | By Angelina Lucas

US and Mexico said to be close on revamping NAFTA

US and Mexico said to be close on revamping NAFTA

But after a year of intense negotiations to salvage the 25-year-old pact, the United States and Mexico appear close to a point where Canada - which had been waiting for US-Mexican agreement on auto industry rules - can rejoin the talks.

On Saturday, he said the USA "relationship with Mexico is getting closer by the hour" in a tweet that made no mention of Canada.

In the long run, the agreements reached between USA and Mexican negotiators could dissuade some investments in Mexico.

USA and Mexican negotiators will continue meeting through the weekend to revamp the North American Free Trade Agreement and Canada is set to rejoin the talks as soon as they are called, Mexico's Economy Minister Ildefonso Guajardo said Friday, reports AFP from Washington.

But trade experts say Canada's omission is - at least in part - a tactic by the White House to divide and conquer as it applies extra pressure on Ottawa to accept what could be a less-palatable deal.

The "sunset clause" - an automatic cancellation of all agreements after five years - has been a major demand from the US administration, but Mexico believes it can agree to a renegotiated version of this.

Along with Canada, they've been negotiating for a year to overhaul the 24-year-old accord at the insistence of President Donald Trump.

Earlier in the day, Guajardo said the two countries were "hours away" from squaring away their bilateral differences.

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He said one executive suggested the change as a way to boost business, although he did not name the individual or the company. President Donald Trump on Friday said meetings with corporate executives had prompted him to ask the U.S.

For weeks, USA and Mexican negotiators have been working to iron out complex bilateral trade concerns while Canada awaits the results and the opportunity to return to the negotiating table.

"The story of these types of things is always defined in the final minute, and I would say that we're practically into the final hours of this negotiation". The U.S. may try to force Canada to go along with changes to NAFTA by presenting the deal with Mexico as a done deal, threatening to exit NAFTA if Canada doesn't go along with the deal.

The U.S.is prepared to negotiate with Canada separately, but like Mexico would prefer to keep the current three-country deal.

"An idea to resolve the impasse is for only certain industries to remain covered by dispute settlement".

Derek Burney, a former Canadian ambassador to Washington, agrees that keeping Canada away from the table in recent weeks is part of the US strategy. A USTR representative did not immediately respond to a request for comment.

Since Mexico's July 1 presidential vote, the bilateral talks have been complicated by the divisions between the incoming and outgoing Mexican administrations over the energy policy.

Jesus Seade, an economic advisor to Mexico's incoming president, Andres Manuel Lopez Obrador, has also been participating in portions of the talks. Mexico's current government, which is overseeing negotiations until Obrador takes office December 1, has already agreed to such a chapter.

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