Canada and Mexico Remain united on for a tri-lateral NAFTA deal.

Canada and Mexico: Committed to a renewed NAFTA deal

 In Compliance Updates

Despite recent claims by the US to be nearing a bi-lateral free trade agreement with Mexico;  Canadian and Mexican officials clearly stated today that both sides were still insisting on a trilateral agreement between the nations.

The largest point of contention continues to be insistence by the US to a 5 year Sunset Clause.  Understandably, Canada and Mexico continue to strenuously oppose this clause.  The instability in the global trade market that this type of clause would create is not deemed to be in the best interest of any of the parties.  Essentially this would put trade negotiations to start every 3 years.

After a meeting in Mexico City, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo said they remained optimistic about negotiations to revamp the 24-year-old trade pact.

U.S. President Donald Trump has repeatedly threatened to withdraw from the pact if he cannot renegotiate it to better serve his country’s interests.

The Mexican Economy minister spoke positively on the prospect of a renewed trilateral NAFTA deal, saying about two-thirds of the agreement has been ironed out.

Although Mexican officials are heading to Washington this week to meet with their U.S. counterparts, Mexico has repeatedly stated that its goal in negotiations is to solidify a modernized NAFTA – between the three nations.

“The fact that we are going to Washington to participate in bilateral talks is to reinforce the concept of the trilateralism of this agreement,” he said. “The essence of this agreement is trilateral, and it will continue being trilateral.”

What is the sunset clause and why are Canada and Mexico so opposed to it?

A NAFTA breakdown comes at a cost for all its partners infographic

The proposed Sunset Clause would require the countries to renegotiate NAFTA every 5 years.  Given the state of the current negotiations, one can only imagine the type of turmoil this would cause throughout the trade community.

Freeland said the sunset clause could harm the auto industry, adding that Ottawa opposed a U.S. investigation of auto imports.

Lopez Obrador, who won the July 1st Mexican Presidential election, has said he wants to accelerate the negotiations. His lead NAFTA negotiator, will join the Mexican delegation in Washington this week.

With the Mexican election results now clearly established, Canada and Mexico have renewed their desire to work together toward a renewed agreement.

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