NAFTA Talks Extend Into 2018 Amid Deadlock

"I'm surprised and disappointed by the resistance to change from our negotiating partners", Lighthizer said with Guajardo to his left and Freeland to his right. President Donald Trump's musings about ending the accord have sparked public warnings from US lawmakers and the private sector about the perils of dismantling a decades-long trade deal that has helped the region's trade balloon to $1.2 trillion annually.

Robert Lighthizer, the US trade representative, said America's neighbors had rejected some text they had previously agreed to in the Trans-Pacific Partnership.

The sources say Canadian negotiators are calling the demand "a non-starter".

Wages have been a contentious issue in NAFTA renegotiation talks because salaries are much lower in Mexico compared to its two northern neighbors, and the USA especially has argued that it places its automotive and other manufacturing industries at a distinct disadvantage. They have also put forward a clause, called "twilight" that could put an end to the NAFTA by five years.

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The fifth round of talks is scheduled for November 17-21 in Mexico City with discussions now expected to stretch into 2018, extending beyond the aim for year's end. It governs how much of a vehicle has to be manufactured in North American to avoid import taxes in the three countries that make up NAFTA. The Trump administration has proposed that at least 50% of the content in cars must be made in the US for vehicles from Mexico and Canada to enter the USA duty-free. Lighthizer insisted that 50 percent of all vehicle parts originate from the United States and 85 percent within North America. "Because of its complex supply chains that cross both borders, the auto industry would suffer the most, with autos accounting for almost 40% of exports to Canada and 22% of exports to Mexico".

Mexican and Canadian officials are set to release a joint statement at 3 p.m. ET on Tuesday, following talks that ended Monday.

Over the a year ago, Mexico has aggressively pursued new or updated trade deals with other countries, seeking new markets for its exports and new partners for imports.

  • Megan Austin