Three's Company, Too? Canada Returning to NAFTA Dance As U.S. and Mexico Approach Auto Deal

Matt Posky
by Matt Posky
threes company too canada returning to nafta dance as u s and mexico approach auto

Canada says it could rejoin the NAFTA discussion, just as the United States and Mexico approach an agreement on automobiles. The two nations engaged in bilateral negotiations a little less than a month ago, seemingly making positive headway on a trade deal.

With President-elect Andrés Manuel López Obrador assuming office in December, it’s in the United States’ best interest to close a deal as soon as possible. It’s assumed the man, frequently referred to as “AMLO,” will make sweeping changes to the Mexican government. However, he also promises to join forces with several smaller parties from both the right and left to create a coalition aimed at rooting out corruption. The resulting level of uncertainty has many fearing difficult Mexican policy changes and trade negotiations in the future, effectively forcing a restart of NAFTA talks.

According to David MacNaughton, Canada’s ambassador to the U.S., the duo are close to finalizing a deal on automotive manufacturing. If so, the Northern nation is prepared to rejoin negotiations.

“If they can resolve their differences on [automotive trade], then I think we can move ahead and have the three of us talk about some of the other issues that affect all of us,” MacNaughton said in an interview with Bloomberg on Thursday.

When asked if he felt positive about future NAFTA negotiations, the ambassador answered in the affirmative.

“I think so,” he said. “We’ve had a number of stops and starts to the negotiation — the most recent being sort of the end of April and early May when I think we came reasonably close to getting an agreement. But then the Mexican election was looming and we sort of agreed to wait until after that. I think the Mexicans and Americans have been talking principally about the auto rules of origin, and things like that where I think we’re pretty aligned with the Americans on the approach to it.”

Despite being in sync with the United States for the most part on automotive matters, Canada still opposes proposals for a sunset clause on the agreement — which would allow a country to quit the North American Free Trade Agreement after five years — and still wants an independent dispute-resolution process. Meanwhile, negotiators for the U.S. and Mexico are ironing out details surrounding regional content requirements for vehicles and a handful of other matters. A final proposal is expected to go public soon.

While the ticking lock element isn’t ideal and nothing has been officially agreed upon, this is probably the most promising update on NAFTA we’ve heard in months.

[Image: NAFTA Secretariat]

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3 of 36 comments
  • Jimmyy Jimmyy on Aug 11, 2018

    Most real Americans are hoping NAFTA goes in the trash heap.

  • Arthur Dailey Arthur Dailey on Aug 11, 2018

    The original Canada-US Free Trade Agreement was initiated by the USA and 'foisted' on Canada by Mulroney's friendship with Reagan. The net result was as predicted a large number of Canadian companies being bought up by multi-nationals, while some manufacturing moved south. Once Mexico was brought in to form NAFTA, again being introduced by the USA and their politicians who were bought/owned by multinational organizations and banks, an increased, if not dangerous amount of manufacturing transferred to Mexico. Mexico being a 'failed' state with no rule of law, but with the extremely low labour rates that global corporations lust after. Including Mexico did not open up a new market to goods from Canada and the USA, instead it just allowed corporations to move to a low wage environment. And with reduced restraints, many of those companies moved their 'head office' to low tax nations/tax havens so that they pay ever decreasing amounts of tax in the nations where their goods are actually sold. Trickle down economics was a crime committed on the populations of Canada and the USA, by corrupt or obtuse politicians.

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