NAFTA talks resume in Mexico but ‘America First’ agenda causing issues

After a month-long hiatus, negotiators from the US, Canada and Mexico will reconvene in Mexico City today for five days of dialogue on NAFTA.

US trade representative Robert Lighthizer has been unyielding in his pursuit of President Trump’s ‘America First’ trade campaign. The last round of talks ended with Canadian and Mexican delegates criticising several US provisions as ‘non-starters’—the most contentious of which was a NAFTA-sourced parts threshold of 85% for tariff free automobiles, access to Canada’s dairy, eggs and poultry industries and the inclusion of a five-year sunset clause that would automatically end the agreement unless renewed.

Having abandoned a December deadline, NAFTA risks becoming a political football as talks carry over into 2018. Election campaigns are scheduled to kick off in all three nations next year and delegates will be under pressure to bring home a deal they can sell to voters.

While progress on headline issues is doubtful, provisions on telecommunications, energy, investment, customs and business regulation are all well advanced and likely to be resolved in the coming days.