Mexico City (CNSNews.com) – In spite of recent optimism expressed by President Trump and others, doubts persist that NAFTA negotiations will be completed before Mexico’s new president takes office in December and a new U.S. Congress is seated in January.
If an agreement isn’t reached before the end of this month, it appears likely Mexico’s current senate and president, as well as the U.S. Congress, would not have a chance to approve or reject a deal.
The U.S. administration is required to give Congress 90 days’ notice about a new deal. The House is meant to be given 60 legislative days and the Senate 30 to approve any new agreement.
Last week, Trump tweeted that Mexico and the U.S. were close to eliminating their differences in ongoing negotiations to renew the U.S.-Mexico-Canada North American Free Trade Agreement.
“Deal with Mexico is coming along nicely,” the president said in the Friday tweet, which also called president-elect Andres Manuel Lopez Obrador “an absolute gentleman.”
The president’s optimism was echoed by Moises Kalach, an international negotiations advisor to the Mexico City business chamber, CCE.
He told Bloomberg News Tuesday that a deal between Mexico and the U.S. has a good chance of being wrapped up by the end of this month.
If not, however, negotiators would be looking at a completely “new calendar” for a completion to the talks, Kalach warned.
Mexico’s economic secretary Ildefonso Guajardo also noted that if the talks aren’t finalized by the end of this month, it would be the responsibility of the new administration of Lopez Obrador, who takes office in December, to sign off on any agreement.
Key unresolved issues include questions about the percentage of parts used in auto manufacturing that have to be made in North America, and a demand by the U.S. that any new agreement include a sunset clause, Guajardo said in an interview last month.
The proposed sunset clause, which both Mexico and Canada oppose, would open the agreement to renegotiation every five years.
“To be quite frank, I just don’t see how we get any NAFTA deal any time soon,” Monica de Bolle, a senior fellow at the Peterson Institute for International Economics, told CNSNews.com.
The Trump administration had hoped to get a new NAFTA deal approved during the lame duck session of Congress after November’s mid-term elections.
“That December timeline just doesn’t apply anymore,” de Bolle said.
Given the uncertainly of the outcome of the mid-term elections, political constraints on the signing of a new NAFTA deal now apply primarily to the U.S., since Lopez Obrador has signaled his support for reaching a new deal.
The sunset clause proposal is “floating in ether and hasn’t progressed in any direction,” she said.
A compromise suggested by Mexico that the wording be softened to require only a “review” – rather than a renegotiation – is unlikely to be approved by the U.S. side, de Bolle said.
Meanwhile trade disputes with China and Turkey have taken the administration’s focus off NAFTA.
“They are fighting too many battles at the same time, and NAFTA is falling by the wayside.”
When NAFTA negotiations began a year ago, attention was focused on the U.S. trade deficit with Mexico.
Since then, the Trump administration imposed tariffs on steel and aluminum imports, straining relations with Canada and making concessions by Ottawa less likely, de Bolle said.
“The problem is that the tensions are just too high at the moment between Canada and the U.S.”
Canada has in fact been absent from the talks this summer, but is expected to return to the negotiating table.
Talks between the U.S. and Mexico resumed in Washington this Wednesday.
Political pressures in the U.S. include concerns that farmers could suffer if no deal is reached.
Sen. Heidi Heitkamp (D-N.D.) tweeted last week that she has heard concerns about uncertainty caused by the administration’s “escalating trade war” and the NAFTA renegotiation.
“As harvest begins in ND, it’s a reminder that our producers have spent years developing export markets which could vanish in just 1 growing season,” she said.