The time frame for the North American Free Trade Agreement (NAFTA) renegotiation talks has been extended and will now continue into 2018. The fourth round of talks between the U.S., Canada and Mexico took place October 11-17. These talks faced significant issues and top NAFTA officials are pushing back against recent U.S. proposals.
One of these U.S. proposals is the controversial change for the way cars are made – currently a rule requires that at least 62% of the parts of a car sold in North America come from the region to avoid import taxes. The Trump Administration is now pushing for an 85% threshold, with 50% requirement of U.S. specific content.
Other contentious U.S. proposals include doing away with dispute-resolution mechanisms that currently limit how the U.S. can retaliate against its trading partners; revisions to intellectual property requirements; new protections for U.S. seasonal produce growers; and adding a “sunset clause” under which NAFTA would have to be re-approved every five years or end. These proposals have been viewed as “non-starters” and some question if this is an attempt by the Trump Administration to undermine the negotiations with “poison-pill” proposals.
The fifth round of talks is scheduled to begin in Mexico City on November 17, 2017. When the NAFTA talks first began in August of 2017, there was a soft deadline to have the deal completed by the end of 2017. President Trump has said he will scrap the trade deal altogether if the countries cannot reach an agreement on revising NAFTA. However, U.S. Trade Representative (USTR) Robert Lighthizer has said the U.S. is not taking active steps to withdraw from NAFTA at this time.