NAFTA talks to continue Thursday in Washington as trade tensions simmer

The top U.S., Canadian and Mexican officials driving NAFTA renegotiations will meet in Washington on Thursday, a Canadian government source said on Tuesday, as pressure for a quick deal mounts.

Although the United States is keen to quickly wrap up negotiations to update the $1.2 trillion North American Free Trade Agreement, officials say several contentious issues must still be resolved.

U.S. Trade Representative Robert Lighthizer wants some kind of agreement in place before campaigning for a July 1 presidential election in Mexico gathers pace.

Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo last met on April 6.

Guajardo said on Monday the three officials might gather again this Thursday in Washington, and the Canadian government source confirmed the meeting would go ahead.

“It’s a continuation of the conversation they started on two weeks ago,” said the source, describing recent exchanges between the three nations as very productive.

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Guajardo and others have said a NAFTA deal could be possible by early May, but significant differences remain on U.S. proposals to revise content rules for the automotive sector and to change dispute resolution mechanisms as well as other issues.

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“I wouldn’t be expecting an announcement out of this meeting (on Thursday),” added the source, who requested anonymity given the sensitivity of the situation.

U.S. President Donald Trump, who blames NAFTA for job losses in the American manufacturing sector, regularly threatens to walk away from the pact unless major changes are made.

Moises Kalach, head of the international negotiating arm of the CCE business lobby, which represents the Mexican private sector at the talks, said the three teams were working “night and day” to get a deal on the new auto sector rules.

For the three nations to agree a new NAFTA, the U.S. team would need to show more flexibility, he said. So far, Trump had not changed his attitude on the toughest issues, he added.

“The Mexican government, and more so the Mexican private sector can’t agree to a bad deal because it won’t pass Mexico’s congress or the U.S. congress,” he said in an interview.