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NAFTA Talks to Resume May 7 as Lighthizer Warns Time is Short

Thursday, May 03, 2018
Sandler, Travis & Rosenberg Trade Report

The trade ministers of the U.S., Canada, and Mexico will resume negotiations on updating NAFTA May 7 after U.S. Trade Representative Robert Lighthizer returns from trade talks in China. The three ministers met for several days straight in Washington, D.C., recently in an effort to push a revised deal forward, resulting in what Canadian Foreign Minister Chrystia Freeland called “very solid, very positive, very good progress.” Lower-level negotiators are continuing to hold discussions in the meantime.

Rules of origin for automobiles continue to be a key hurdle. According to a Reuters article, the U.S. has lowered the amount of regional content it is proposing to require for autos to qualify for preferential treatment under NAFTA from 85 percent to 75 percent and has floated the idea of a four-year transition to that level from the current 62.5 percent requirement. The U.S. has also proposed specific rules on wages for workers who make passenger cars and pickup trucks. However, U.S. and Mexican auto industry officials have reportedly objected to the proposal.

Lighthizer said this week he would like to finalize an agreement by the end of May because otherwise the timeframes specified in the U.S. law for expedited congressional consideration of trade agreements could push a vote to January or later, when the House and/or Senate might no longer be controlled by Republicans after November’s mid-term elections. Lighthizer continues to state that he is aiming to conclude an agreement that will earn bipartisan support.

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