Mexican and Canadian officials are optimistic they can reach a NAFTA trade deal with the U.S. in the next several months, even amid sticking points on car production, an automatic expiration clause and President Donald Trump’s threats to impose tariffs on foreign vehicles.
Officials from both countries said Wednesday that talks on the North American Free Trade Agreement will remain a three-way negotiation, despite suggestions by Trump that he might pursue separate trade deals with both countries.
The nations will work to land an agreement before U.S. mid-term elections in early November, Mexican Economy Minister Ildefonso Guajardo said Wednesday as he and Foreign Minister Luis Videgaray hosted their Canadian counterpart Chrystia Freeland in Mexico City.
Videgaray said "Canada and Mexico not only share geography, history and friendship, but also principles and common goals, and we are a team and act as a team."
Freeland said "Canada very much believes in NAFTA as a trilateral agreement."
While some of the negotiations take the shape of meetings between just two nations, and the U.S. has expressed a preference for bilateral deals, Mexico and Canada remain committed to a trilateral agreement, they said.
"While the ultimate deal will be trilateral ... it's completely normal to have a bilateral meeting," Freeland said.
High-level NAFTA talks are picking up again this week after two months of limited negotiations that were marred by tit-for-tat tariff battles and diplomatic fallout. Guajardo is traveling to Washington on Thursday for talks with U.S. Trade Representative Robert Lighthizer. Combined with Wednesday’s meeting in Mexico, the bilateral gatherings are the busiest NAFTA negotiations have been since May.
Many of Trump’s senior economic advisers expect him to impose a 25 per cent tariff on about US$200 billion in foreign-made automobiles later this year, the Washington Post reported on Wednesday, citing three people briefed on the matter.
Freeland reiterated her view that slapping tariffs on automobiles from Canada based on a national security review is “absurd.” She said she’s confident the U.S. will follow common sense and refrain from imposing the tariffs. Videgaray also said Mexican vehicles don’t pose a threat to the U.S.
“In the next few months and definitely before the election process in the United States, we are trying to constructively advance this negotiation,” Guajardo said Wednesday. “We believe that there is the possibility of finding a safe landing zone.”
Freeland said Canada also opposes a "sunset" clause proposed by Trump that would allow countries to opt out of the pact every five years. Mexico shares the position that such a clause would hurt longer-term investment.
Bloomberg and the Associated Press contributed to this report.