politics

Pivotal Nafta Talks to Start Early, Be Longest Round Yet

  • Negotiations extended to nine days from original six: people
  • Two days toward end reserved for resolving toughest issues

Canada and Mexico Looking for U.S. to Show Flexibility

The Nafta talks that are set to begin in Montreal will start on Jan. 21, two days earlier than planned and last for nine days as teams from the U.S., Canada and Mexico push to deliver results for a cabinet ministers’ meeting on the final day, according to two people familiar with the plans.

Two full days, Jan. 27 and Jan. 28, have been tentatively reserved for reports to chief negotiators, who handle some of the toughest issues, and preparing for a Jan. 29 ministers’ meeting, according to the people, who asked not to be identified because the schedule isn’t public. Talks will begin on Sunday, with energy, investment, financial services, agriculture and other issues on the agenda, according to one of the people. Rules of origin -- one of the thorniest subjects, related to manufactured goods such as cars -- will be reserved for the final days of talks, as in previous rounds.

The U.S. is running out of patience with Canadian and Mexican resistance to key American proposals, according to two other people familiar with the matter. The U.S. is serious about its threat to withdraw if there’s no breakthrough on proposals the Trump administration has made that are intended to rebalance trade, said one of the people, who spoke on condition of anonymity because the negotiations aren’t public. The Trump administration wants to see serious counteroffers to U.S. demands like tightening content requirements for cars.

Mexico sees growing Nafta consensus even amid Trump threats

The tension between the U.S. and its trading partners, especially Canada, sets up a pivotal round of talks. With the negotiations on home turf, Justin Trudeau’s Liberal government will want to be seen standing up to Canada’s bigger neighbor and its Republican president. For its part, the U.S. won’t be happy with merely procedural discussions on how to address the administration’s toughest demands.

"There are indications that negotiations could produce some preliminary agreement on key points,” said Benito Berber, senior Latin America economist at Nomura Holdings Inc. Those are “the comments from Economy Minister Guajardo from Mexico suggesting flexibility on rules of origin, comments from Minister Freeland from Canada suggesting some possible counterproposals to controversial issues and the mere length of the Montreal round of nine days, the longest round so far.”

— With assistance by Andrew Mayeda, and Josh Wingrove

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