The fourth round of negotiations of the North American Free Trade Agreement (NAFTA) began this week in Washington, D.C. with many controversial topics yet to be decided. Among the key issues yet to be decided, agriculture is expected to be on the agenda this weekend, including the politically sensitive issue of Canada’s highly protected dairy sector.
U.S. Trade Representative Robert Lighthizer kicked off the latest round by announcing an agreement on a chapter on competition. The countries have agreed to increased “procedural fairness in competition law enforcement,” his office said in a statement. It’s the second topic to be agreed on along with the chapter on small- and medium-sized businesses.
U.S. negotiators on Wednesday presented a proposal for a so-called “sunset clause” that would see the North American Free Trade Agreement expire after five years unless the parties can agree to extend it, according to reports from Bloomberg. According to several experts, the clause is expected to increase uncertainty for private sector investments and is unpopular with Canada, Mexico and many industries in the U.S.
Another key issue expected to be addressed during this round of negotiations is America’s merchandise trade deficit. President Trump has repeatedly threatened to withdraw if he does not win concessions to reduce a U.S. trade deficit of around $64 billion with Mexico. In its push to shrink the gap, the U.S. is expected to offer a proposal as soon as this week that would raise the amount of North American parts in NAFTA-made cars, from 62.5 percent currently, and potentially a U.S.-specific content requirement.
With this week’s negotiations representing a halfway point in the scheduled seven sessions, many U.S. businesses and organizations involved are worried the talks will fall through and the U.S. will ultimately withdraw from the agreement.
