NAFTA renegotiation talks will bleed into next year amid 'challenges'

Time running out for Nafta talks, set to be extended: Sources

Canada and Mexico will reject the US's latest proposals for NAFTA but offer to continue negotiating, CNBC reported.

Among other demands, he also wants the trade agreement renogiated every five years to allow USA companies access to independent arbitration if companies in another country violate the deal. Critics say this has allowed manufacturers to use NAFTA to get around USA import taxes while doing a substantial amount of manufacturing in China and other countries outside North America.

"If they react negatively [to USA proposals], it may be enough for the U.S.to say, 'Enough, we're pulling out, '" said William Reinsch, a veteran Washington trade specialist who is a fellow at the Stimson Center think tank. A fifth round of negotiations will take place in Mexico City starting November 17, with a "longer intersessional period" before it to consider the proposals.

This year's NAFTA re-negotiations stem from U.S. President Donald Trump's insistence that the agreement be remodeled lest the U.S. leave the deal entirely. Since it was implemented, Mexico's unemployment has risen and the deal put about two million small-scale Mexican farmers out of business, forcing many of them to migrate to the United States looking for work. Both counties also oppose US proposals designed to create jobs for American auto manufacturers by putting more stringent limits on how much of a vehicle can be made outside of North America to qualify for immunity to import taxes in the three NAFTA countries. The Trump administration has proposed that at least 50% of the content in cars must be made in the US for vehicles from Mexico and Canada to enter the USA duty-free.


The U.S. proposal would also require that cars sold into the United States be 50 percent manufactured here in order to qualify for special NAFTA status.

Mexican and Canadian officials are set to release a joint statement at 3 p.m. ET on Tuesday, following talks that ended Monday.

Lighthizer said he has see no sign that Mexico and Canada are ready to make the major changes needed to the update pact.

Trump has threatened to terminate the trade agreement if Canada and Mexico do not agree to his demands.

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