On Tuesday, United States Trade Representative Robert Lighthizer, Canadian Foreign Affairs Minister Chrystia Freeland and Mexican Secretary of the Economy Ildefonso Guajardo concluded the second round of the renegotiation and modernization of the North American Free Trade Agreement in Mexico City, Mexico. This concluded five days of meetings by a team of subject matter experts covering various negotiation topics.
The next round of talks will take place in Ottawa later in September.
Building on the progress made in the first round of negotiations, more than two dozen working groups comprised of trade experts and technical officials worked diligently to advance the discussions and exchanged information and proposals. In several groups, this engagement resulted in the consolidation of proposals into a single text upon which the teams will continue to work during subsequent negotiation rounds.
The parties say in a statement that important progress was made and they expect more to come. However, major issues still appear to be unresolved. These include the U.S.’s desire for expanded use of U.S.-made materials in products and disagreements about the mechanisms for resolving trade disputes.
Another hot button issue is the current low wages of Mexican workers. They are appealing to U.S. and other international corporations and any effort to raise wages for Mexican workers as part of a retooled NAFTA have drawn opposition from business.
Lighthizer said the Trump administration favours raising those wages as it would theoretically give U.S. firms less incentive to relocate manufacturing facilities south of the border.
Although President Trump has repeatedly bashed NAFTA, calling it the worst trade deal ever, the prospect of NAFTA’s dissolution has caused concern from U.S. agriculture, automakers and other industries that have benefited from the agreement. Some U.S. farm states are heavily dependent on exports to Mexico.
USTR Lighthizer said in his individual statement “As you know, these negotiations are a very important priority for President Trump. The American delegation is focused on expanding opportunities for American agriculture, services, and innovative industries. But, as I alluded to in my opening round, we also must address the needs of those harmed by the current NAFTA, especially our manufacturing workers. We must have a trade agreement that benefits all Americans, and not just some at the expense of others. I am hopeful we can arrive at an agreement that helps American workers, farmers, and ranchers while also raising the living standards of workers in Mexico and Canada.”