Mexico and Canada insist on three-way NAFTA deal

MEXICO CITY (Reuters) – Canadian and Mexican officials insisted that the North American Free Trade Agreement remain a trilateral pact on Wednesday and reiterated their opposition to U.S. calls for a so-called “sunset clause” that could end the deal after five years.

Mexico’s Foreign Minister Luis Videgaray, Canada’s Foreign Minister Chrystia Freeland and Mexico’s Economy Minister Ildefonso Guajardo pose for a picture after delivering a joint message in Mexico City, Mexico July 25, 2018. REUTERS/Gustavo Graf

After a meeting in Mexico City, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo said they remained optimistic about the progress of the negotiations to revamp the 24-year-old trade pact.

Negotiations began in August but stalled in the run-up to the Mexican presidential election. That was due, at least in part, to U.S. demands for sweeping changes in the auto sector and a for sunset clause, which would put the deal forming one of the world’s largest trading blocs up for renewal every five years.

Canada’s Foreign Minister Chrystia Freeland waves after delivering a joint message wit Mexico’s Foreign Minister Luis Videgaray and Mexico’s Economy Minister Ildefonso Guajardo (not pictured) in Mexico City, Mexico July 25, 2018. REUTERS/Gustavo Graf

U.S. President Donald Trump has repeatedly threatened to withdraw from the pact if he cannot renegotiate it to better serve his country’s interests.

Freeland and Guajardo struck an upbeat tone at a joint press conference, with Guajardo saying that about two-thirds of the agreement has been ironed out.

In Washington, U.S. Agriculture Secretary Sonny Perdue raised the prospect on Wednesday that NAFTA could be negotiated separately with Canada and Mexico, in order to reach an agreement first with Mexico by September.

Although Mexican officials are heading to Washington this week to meet with their U.S. counterparts, Guajardo stressed that a deal between all three countries remained the goal.

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“The fact that we are going to Washington to participate in bilateral talks is to reinforce the concept of the trilateralism of this agreement,” he said. “The essence of this agreement is trilateral, and it will continue being trilateral.”

Support for a three-way agreement was also voiced by Freeland, who noted she had spoken with U.S. Trade Representative Robert Lighthizer on Monday.

In her comments, Freeland warned that the sunset clause could harm the auto industry and criticized a U.S. investigation into auto imports, saying the idea that Canadian products pose a security threat was “absurd and unacceptable.”

Mexican President-elect Andres Manuel Lopez Obrador, who won the nation’s July 1 election in a landslide, has said he wants to accelerate the negotiations. His lead NAFTA negotiator, Jesus Seade, will join the Mexican delegation in Washington this week.

“If there are conditions in the short term to find an agreement that is in the best interest of North America and of Mexico we will be, without a doubt, committed to achieving it,” Guajardo said.

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