News & Politics

Mexican Government Says Breakthrough Near in NAFTA Talks

President Donald J. Trump (Photo by: Michael Reynolds/picture-alliance/dpa/AP Images)

Mexican Economy Minister Ildefonso Guajardo said in a press conference that a breakthrough in the stalled renegotiation of the North American Free Trade Agreement could come as early as next week.

Reuters:

Mexico and the United States resumed talks last week, after a U.S. move to slap tariffs on Mexican and Canadian metal exports and Mexico’s July elections stalled negotiations that began last year when President Donald Trump demanded a better deal for U.S. workers.

“Technically, we are ready to move into finishing the issues, Mexico-U.S. issues, the most next week. There are very good probabilities that we’ll be landing solutions,” Guajardo said in English.

“We are optimistic that we can try to land a deal before the end of August,” adding there were “three critical, specific points” to resolve that he declined to specify.

The “critical” points are almost certainly related to rules for Mexico’s auto sector, including a U.S. demand for higher wages for auto workers. With a new socialist government in power, the Mexican government may be more flexible.

Rules for the auto sector, including a U.S. demand for higher wages in Mexico, as well as a U.S.-proposed sunset clause that would kill the deal if it is not renegotiated every five years, have been major stumbling block to talks.

Seade said the issue of the sunset clause could be broached next week. “It is something we have to discuss and the time has come,” he said. “We have said that is not something we can work with.”

Guajardo said neither the sunset clause nor wages were being discussed between Mexico and the United States on Friday.

Now the horse trading begins.  Making the sunset clause effective over a longer period in exchange for stricter rules on auto exports might be one of the compromises in the works.

Even if NAFTA isn’t substantially altered, a successful renegotiation will be a triumph for Trump and a much welcome boost to Republicans going into the midterms.