On Wednesday, August 16, Canada, Mexico, and the U.S. began the opening round of renegotiations to NAFTA in Washington, D.C. The opening round lasted through Sunday and was largely closed-door; however, the U.S. put forth its objectives for the negotiations last month. The three top negotiators, U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland, and Mexican Economy Secretary Ildefonso Guajardo, began the day with opening statements.

U.S. Trade Representative Robert Lighthizer said in his opening statements, “We cannot ignore the huge trade deficits, the lost manufacturing jobs, the businesses that have closed or moved because of incentives, intended or not, in the current agreement.” The U.S. is attempting to make reducing the trade deficit between the U.S. and Mexico a priority; however, the objectives put forth are also very tough on Canada, especially in regard to dairy. One of the points all three countries agree on is modernizing the agreement to include digital trade, e-commerce, and updated customs procedures.

In regard to rules of origin, the U.S. brought forth the idea of a new “national content” rule in regard to automotive trade which it believes would encourage more parts to be made in the U.S. Both Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo were vocal about the NAFTA rules of origin continuing to be applicable on a regional basis and not be changed.

The timeline for the renegotiation is very tight. With Mexican elections coming up in July 2018, the countries are hoping to sign the agreement by the end of this year. Negotiators are expected to head to Mexico City for the second round from Sept. 1-5, and to Canada for the third round from Sept. 23-27. There are just 11 days between the close of the first round and the start of the second, which reflects the aggressive pace that all three countries have expressed interest in pursuing.

For more information on how this could affect your business, please contact Robert Stang.