NAFTA 2.0: US and Canada aim to finalise trilateral deal today

Top NAFTA negotiators from Canada and the United States increased the pace of their negotiations Thursday to resolve final differences to meet a Friday deadline, with their Mexican counterpart on standby to rejoin the talks soon. Despite some contentious issues still on the table, the increasingly positive tone contrasted with US President Donald Trump's harsh criticism of Canada in recent weeks, raising hopes that the year-long talks on the North American Free Trade Agreement will conclude soon with a trilateral deal. "Canada's going to make a deal at some point. It may be by Friday or it may be within a period of time," US President Donald Trump told Bloomberg Television. "I think we're close to a deal." Trilateral talks were already underway at the technical level and Mexican Economy Minister Ildefonso Guajardo was expected to soon rejoin talks with US Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland, possibly later on Thursday, people familiar with the process said. President Donald Trump said in a Bloomberg interview: "Canada's going to make a deal at some point. It may be by Friday or it may be within a period of time," Trump said. "I think we're close to a deal."

Mexico says Trump's unsurprising Nafta threats a negotiating tactic

US President Donald Trump's threat to scrap the Nafta trade pact is little more than a negotiating tactic, aimed at his political base, that should neither scare nor surprise Mexico, the country's foreign minister said on Wednesday as the peso weakened.

In a speech in Phoenix on Tuesday night, Trump reiterated his threats to terminate the North American Free Trade Agreement, saying the pact's future looked bleak. Trump has long called the 1994 pact a bad deal that hurt American workers, saying it should be re-negotiated or ended.

Initial talks to re-negotiate Nafta between Mexico, the United States and Canada ended in Washington this weekend with no sign of a breakthrough and further discussions are due in Mexico City in September.

Following Trump's remarks on Tuesday, Mexico's peso weakened more than 1 per cent in early trading on Wednesday before paring losses, as market jitters on the future of Mexican exports to the United States continue to plague the currency.

Videgaray, speaking on local television, sought to brush off the threat, saying Trump's comments were simply a negotiating tactic and Mexico would keep negotiating as well. The comments were not a surprise, nor would they scare Mexico, he added.
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Three big problems with Trump's new Nafta plan

The Trump administration has outlined its plans to renegotiate the North American Free Trade Agreement (NAFTA). It says the US will seek a “much better” agreement that reduces the trade deficit between the US and its partners, Canada and Mexico. In response, the two countries released brief statements welcoming the proposal. They say they consider a possible renegotiation as a step towards modernising NAFTA to address the new realities and challenges of the 21st century.

Despite these good intentions and purported goodwill, the US objectives for a revised NAFTA are unachievable. Three problems with the US negotiating position reveal the limited understanding of Donald Trump, the US trade representative, Robert Lighthizer (who will lead the negotiations), and their advisers about NAFTA and its side agreements.

1. A mistaken view of job losses

The US case for renegotiating the agreement is based on the claim that NAFTA is to blame for various (and unspecified) “problems for many American workers”. Allegedly, these problems have led to the explosion of US trade deficits since 1994, when the agreement entered into force, and the closure of “thousands of factories”. According to the US trade office, this situation left millions of American workers “stranded” and unable to use the skills in which they had been trained.

As candidate and president, Trump has repeatedly claimed that “disastrous trade deals”, including NAFTA, resulted in the loss of manufacturing jobs in the US. But US manufacturing jobs were not lost to Mexico, they were lost to China and technological change.
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G20 summit: Donald Trump says he still wants Mexico to pay for border wall

US President Donald Trump said on Friday that he still wants Mexico to pay for a planned border wall, as he met his Mexican counterpart for the first time as head of state.

Asked at the meeting with Enrique Pena Nieto on the sidelines of the G20 summit in Hamburg, Germany, if he still wanted Mexico to pay for the wall, Trump said: "Absolutely".

Before that, both presidents delivered statements with Trump hailing the "successful day" so far.

"We're negotiating NAFTA (the North American Free Trade Agreement) and some other things with Mexico and we'll see how it all turns out, but I think we've made very good progress," Trump said.

Pena Nieto, through a translator, said that the meeting will help the two countries continue a "flowing dialogue", in particular "for the security of both nations, especially for our borders."

The Mexican president noted that "migration" is an issue that has "occupied" both administrations. He added that it was a "co-responsibility to deal with organised crime issues."

Building a wall between Mexico and the United States to stop illegal immigration -- and Mexico paying for it -- was one of Trump's key campaign pledges in last year's election.

In January, Pena Nieto cancelled a trip to Washington in response to Trump's insistence on the issue, plunging the countries' relations into their biggest crisis in decades.
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TPP trade deal members seek to move ahead without US

Remaining members of the Trans Pacific Partnership (TPP) free trade agreement are working on a statement to reaffirm their commitment to it, despite the withdrawal of the United States, sources close to the discussions said.

Some still hope for the eventual return of the United States to the deal ditched by US President Donald Trump, because of his readiness to shift position on other issues, Malaysia's trade minister said.

Talks are happening on the sidelines of an Asia-Pacific Economic Cooperation (Apec) meeting, the biggest trade gathering since Trump upended the world order with his "America First" policy.

The competing visions are evident at this weekend's Apec meeting of ministers from countries that account for well over 40 per cent of world trade.

While new US Trade Representative Robert Lighthizer will hold bilateral talks with key countries, China will be pushing its favoured Asian trade agreement as it puts itself forward as a global free trade champion.

Japan is leading the countries that still want to persist with the much more comprehensive TPP agreement, abandoned by Trump in one of his first acts in office and which does not include China.

Sources close to the discussions said the so-called TPP-11 nations - the 11 left after the United States withdrew - were planning a statement of commitment to the pact.

"There will be two main points: 1. To aim for an early entry into force of the TPP-11 2. To bear in mind an environment where a signatory country can return," said one source close to the discussions who was not authorised to speak to the media.

The agreement is due to take effect next year.

CHALLENGES

Among the challenges is keeping on board Vietnam and Malaysia, which would have been big beneficiaries from the agreement if it included the United States.

Some renegotiation would be needed for the deal to proceed without the United States, Malaysian Trade Minister Mustapa Mohamed told Reuters. A Vietnamese official expressed a similar view.

Mustapa said there was optimism the United States would return one day, because Trump had shown readiness to shift his position on other matters, such as softening his stance towards China.
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