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NAFTA Talks See First Completed Chapter, “Significant Progress” in Other Areas

Friday, September 29, 2017
Sandler, Travis & Rosenberg Trade Report

Work on one chapter of an updated NAFTA was largely completed and “significant progress” was made on others at the third round of talks held Sept. 23-27 in Ottawa. However, U.S. Trade Representative Robert Lighthizer said there is still “an enormous amount of work to be done, including on some very difficult and contentious issues.” The next round of talks is scheduled for Oct. 11-15 in Washington, D.C.

According to a trilateral statement, discussions have been substantively completed on small and medium-sized enterprises, “effectively concluding negotiations on that chapter pending specific outcomes in related discussions.” This chapter aims to enhance SMEs’ ability to participate in and benefit from the opportunities created by NAFTA, including through cooperative activities, information sharing, and the establishment of a trilateral SME dialogue involving the private sector, non-government organizations, and other stakeholders. Negotiators are also working on modernizing other aspects of NAFTA that would benefit SMEs, including customs and trade facilitation, digital trade, and good regulatory practices.

The statement adds that “meaningful advancements” were made in the areas of  telecommunications, competition policy, digital trade, good regulatory practices, and customs and trade facilitation. Initial offers were exchanged on market access for government procurement and discussions were “advanced substantively” in the competition chapter, which is expected to be completed prior to the next round. Negotiators are now working from consolidated texts in most areas.

However, there remains concern that the three partners will not be able to conclude negotiations by the end of the year. Following the third round senior Mexican and Canadian officials pointed out that the U.S. had not yet submitted detailed proposals on some issues that are expected to be particularly contentious, including lowering the U.S. trade deficit, revamping the dispute settlement process, and tightening rules of origin, particularly with respect to automobiles and auto parts. According to a Reuters article, however, Lighthizer defended the U.S. approach, stating that “any suggestion that we’re not operating beyond a normal pace is just flat wrong.”

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