NAFTA 7th Round | Image: Washington Examiner

NAFTA 7th Round | Image: Washington Examiner

The seventh round of NAFTA negotiations between the US, Canada and Mexico concluded in Mexico City on 2 March. Three days later, the countries’ top negotiators held a joint press conference to reveal the overall progress of what they have coined ‘NAFTA 2.0’.

The US’ key negotiator, Robert Lighthizer, highlighted that progress did not meet expectations in the seventh round. ‘We are dealing with a large number of difficult issues, very technical,’ he said.

While he congratulated all negotiators involved, he stressed that an outdated NAFTA will need agreement on 30 chapters. ‘After seven months, we have just completed six,’ he said. ‘These things tend to converge toward the end of the negotiation,’ said Lighthizer who urged NAFTA to be rebalanced in order to improve the treatment of US workers and businesses, and discourage outsourcing.

But then on Sunday 4 March, the chairman of the US House of Representatives Ways and Means Committee, Kevin Brady, confirmed that there is a possibility of exemptions for both Canada and Mexico. President Donald Trump then tweeted, however, that only a ‘new and fair’ NAFTA deal will lead to exemptions on 5 March.

Any new tariffs could potentially affect, not only cross-border natural gas pipeline projects in the works, but could also lead to a downturn in the Mexican economy, as well as the automotive industry in the three countries.

Mexican chief negotiator Ildefonso Guajardo also said at the conference that time will resolve differing postures and perceptions by each negotiating country.  ‘We are about to close out a set of chapters, which only have one or two differences [between countries],’ he stated. ‘We believe that we will resolve them in the following inter-session round that will last five weeks,’ referring to telecommunications, e-commerce and energy, state-owned enterprises and financial services.

Mexican negotiators have, however, eased most of their initial stances, resulting in the announcement of new energy and state-owned enterprises chapters. This will probably usher in changes to both Pemex and the Comisión Federal de Electricidad (CFE) in light of the country’s 2014 energy reforms.

The anticipated meeting between Trump and President Enrique Peña Nieto — initially expected to have taken place over the past two weeks — was cancelled after apparent friction between the leaders. A scheduled meeting is yet to be announced. Luis Videgaray Caso — the Foreign Relations Secretary and key participant in the bilateral meetings between the presidents — has not spoken publicly about the cancellation.

This analysis is part of our new Mexico Politics & Security publication. If you would like to receive a free sample then please click on the tab below.

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!