Daily Management Review

Toughest Nafta Issues To Follow The Latest Round Of Scheduled Negotiations


02/26/2018




Toughest Nafta Issues To Follow The Latest Round Of Scheduled Negotiations
Mexico and Canada are hoping to finish off some of the more contentious issues surrounding the North American Free Trade Agreement (Nafta) trade deal before elections in Mexico after finishing off with settlement of the issues are not so touchy for the United States in fresh round of talks that are scheduled to begin soon.
 
The six-month long ongoing Nafta agreement has yet to meet any of the tough demands made from the partners by U.S. president Donald Trump even though there has been some progress on the technical details for a revamped hashed Nafta deal.
 
Officials have however said that during the Mexico round of talks, it is unlikely that the huge and contentious demands made by the White House such as imposition of a clause that would defectively bring an end to the Nafta deal after a period of five years, or the calls for ringing significant alterations in the automotive content rules or the mechanism for resolution for disputes.
 
Trump has earlier blamed the Nafta for some of the significant loss of jobs in the U.S in the manufacturing sector and has threatened to walk out of the deal if the U.S. demands are not met satisfactorily.
 
“I think there’s going to be major progress on the technical issues and major obstacles on the critical issues,” Bosco de la Vega, head of the Mexico’s National Agricultural Council farm lobby, said referring the talks that are scheduled to continue till March 5.
 
According to the estimates of de la Vega, political would have to decide about 10 per cent of the rehashed Nafta deal eventually following the completion of agreement on technical chapters like blockades for trade and e-commerce and those regarding state-owned enterprises.
 
The rules of origin – the most contentious demands made by the Trump administration where demands have bene made to enhance the volume of auto content sourced from the Nafta region, is to be discussed in the latest round of negotiations. 
 
The Nafta agreement mandates that 62.5 per cent of the final net cost of a vehicle should originate from the countries covered by the deal – the U.S., Canada and Mexico, so that vehicle manufacturers can side step tariffs. Te demand for Trump has bene to increase that number of 85 per cent.
 
“You can’t have a successful negotiation if there’s no change to the rules of origin,” said a Mexican official, to the media speaking on condition of anonymity, adding: “It won’t be 85 percent. We’re not sure what the number is going to be.”
 
Sources have also told the media that Trump and auto sector leaders belonging to the U.S. has to come to an agreement to enable a final agreement.
 
U.S. and North American auto industries and manufacturers have said that they would lose out on competitiveness and their regional supply chains would be damaged because of Trump’s demands.
 
(Sorce:www.reuters.com)






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