Dive Brief:
- Talks to renegotiate NAFTA picked up speed in July, after negotiators took a two-month hiatus to observe the outcome of Mexico's presidential election.
- Mexican representatives — including Jesus Seade, Mexican president-elect Andrés Manuel López Obrador's (AMLO) designated lead negotiator — traveled to Washington D.C. for bilateral talks on July 26. Reports indicate U.S. Trade Representative Robert Lighthizer is pushing to have a deal by August.
- Canada and Mexico also conferred bilaterally in Mexico City on Wednesday, reaffirming their joint opposition to U.S. proposals for a "sunset clause" and their intention to sign a trilateral deal.
Dive Insight:
"The window of opportunity for the current administration in Mexico to finish the negotiation is open at this moment," Mexican Economy Minister Ildefonso Guajardo said in Spanish after Thursday's talks, according to El Sol de Mexico. "It closes at the end of August and that is the expectation."
Talks to renegotiate NAFTA have undergone a long and winding road since they began nearly a year ago. Faced with a presidential election in Mexico in July 2018, and midterm elections in the U.S. in November of that year, negotiators sought to expedite the process.
But tough negotiating positions, trade wars and political uncertainty got in the way, and time and time again, they missed their own deadlines. The questions onlookers face now is: Will August be any different?
"AMLO is optimistic that they could reach an agreement this year," Alberto de la Peña, a partner at Haynes and Boone with close business contacts in Mexico, told Supply Chain Dive. "If that happens, I think all those tariffs that have been imposed between the U.S. and Mexico ... will go away."
Guajardo said nine out of 30 chapters are finished, and 10 are almost complete, according to El Sol de México. The remaining topics are "very specific," he said, adding he could not predict whether a deal would be finished by August, although they would try.
It may in fact be easier to push a new deal through the country's Congress after December when the new president takes office with a legislative majority.
Meanwhile, the United States faces an election of its own and Speaker of the House Paul Ryan has said August is the last possible month to bring a new deal to the U.S. Congress. (He made a similar claim about May.) Some reports suggest Canada is playing politics with NAFTA, too, ahead of its own elections.
At this point, it would be surprising if negotiators inked a deal by August. The die is cast, but there is a new set of characters in play now — and more to come after the midterm elections.
