Mexico, Canada to keep talking amid bleak Nafta mood

Canadian Prime Minister Justin Trudeau and his wife Sophie Gregoire Trudeau, with Mexican President Enrique Pena Nieto and his wife Angelica Rivera, at a welcoming ceremony at the Palacio Nacional in Mexico City.
Canadian Prime Minister Justin Trudeau and his wife Sophie Gregoire Trudeau, with Mexican President Enrique Pena Nieto and his wife Angelica Rivera, at a welcoming ceremony at the Palacio Nacional in Mexico City.PHOTO: BLOOMBERG

Show of unity comes after US proposal to add clause for renegotiations every 5 years

MEXICO CITY • The leaders of Mexico and Canada have presented a united front for talks with United States President Donald Trump on the future of the North American Free Trade Agreement (Nafta), committing to continued trilateral negotiations after US negotiators put forward a contentious proposal for a "sunset clause".

"As we move forward with renegotiations, we will continue to work towards our shared goal of a win-win-win agreement to ensure that the new provisions are fair and beneficial to all three countries involved," Canadian Prime Minister Justin Trudeau said, adding that he and Mexican President Enrique Pena Nieto are "confident" the three countries can find a Nafta "framework" to drive economic growth.

But officials from both countries yesterday said talks under way in Washington to overhaul the pact should not add a sunset clause that would force renegotiations of the US$1 trillion (S$1.36 trillion) pact every five years.

Mexico's Economy Minister Ildefonso Guajardo, speaking on local television, said Nafta should not require the three trade partners to rehash the treaty every five years or see it disappear, as proposed by US negotiators. He added that if the US opts to abandon the treaty, as Mr Trump has threatened to do, Mexico and Canada would still be subject to Nafta rules.

Canada's International Trade Minister Francois-Philippe Champagne, appearing with Mr Guajardo on the same television programme, said a sunset clause would result in uncertainty.

After Mr Trump mused about breaking Nafta into bilateral deals, the Canadian and Mexican leaders called for the trade deal to be preserved and modernised, and praised each other for aid provided during natural disasters.

The US proposed its so-called sunset clause for Nafta on Wednesday, while so-called rules of origin - which determine how much of a product must come from Nafta countries to receive the pact's benefits - were set for discussion yesterday in Washington.

WIN-WIN-WIN

Prime Minister Trudeau and myself will continue to work to reach a beneficial and positive upgrading for the three countries... I would not pay much attention to any statements other than that which happens at the negotiation tables.

MEXICAN PRESIDENT ENRIQUE PENA NIETO, appearing to downplay US President Donald Trump's threats to break Nafta into bilateral deals.

The rules of origin, particularly for cars, are among the most controversial subjects as Mr Trump aims to repatriate manufacturing jobs from Mexico by rewriting trade rules.

Mr Pena Nieto, who began by thanking Mr Trudeau for his support of earthquake recovery efforts, said their countries were working to boost bilateral ties and to improve Nafta. "Prime Minister Trudeau and myself will continue to work to reach a beneficial and positive upgrading for the three countries," Mr Pena Nieto said, before later appearing to downplay Mr Trump's threats.

"I would not pay much attention to any statements other than that which happens at the negotiation tables," he said, adding that the talks can make North America a more competitive economic region by including, for instance, e-commerce. The deal "cannot be good for just one country and we can't be hostage to only one position", he added.

Mr Trudeau said Canada would not walk away from the negotiating table based on proposals so far. "We are pleased to be talking about ways we can improve Nafta," he said.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on October 14, 2017, with the headline 'Mexico, Canada to keep talking amid bleak Nafta mood'. Print Edition | Subscribe