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US and Mexico restart NAFTA negotiations as prospects of reform accelerate

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US and Mexico restart NAFTA negotiations as prospects of reform accelerate

Chrystia Freeland Ildefonso Guajardo Villarreal Robert E. Lighthizer
Chrystia Freeland Ildefonso Guajardo Villarreal Robert E. Lighthizer
Photo: Canadian Press/Sean Kilpatrick

US and Mexican officials will today meet in Washington to continue trade negotiations.

Last Friday, US and Mexican negotiators announced progress on NAFTA automobile rules. According to insiders involved with the negotiations, Mexico is moving closer to a US proposal of raising the threshold for regional content to 75% (it is at 62.5% currently) and mandating that a proportion of vehicles be made in Mexican factories at a $16 hourly minimum wage.

Notably, Canada has been temporarily left out of the recent rounds of automobile talks after reportedly being told that Washington will strike an auto deal with Mexico before first.

With the July election of leftist-populist Andres Manuel Lopez Obrador in Mexico, Donald Trump’s goal of revising “the worst trade deal ever” is looking increasingly likely. A combination of the departing Mexican administration’s desire to wrap up negotiations to secure a legacy along with the Trump administration’s desire to conclude negotiations before a leftist-protectionist presidency takes the reigns in Mexico suggests that both sides want a deal, and want one soon.

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Signs of progress on the trade rules governing automobiles—one of the most challenging areas—could cinch a comprehensive trade deal between the US and Mexico, which could furthermore lead to a greater NAFTA deal by motivating Canada to join in a trilateral agreement.v

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