Flags of Canada, Mexico and the US are seen before a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico. Picture: REUTERS/EDGARD GARRIDO
Flags of Canada, Mexico and the US are seen before a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico. Picture: REUTERS/EDGARD GARRIDO

Washington — Agreement between Mexico and the US on outstanding bilateral issues in renegotiating the North American Free Trade Agreement (Nafta) could be just a few hours away, Mexican officials said on Wednesday.

"We hope we’ll have a solution in the next couple of hours, or the next couple of days," Mexican economy minister Ildefonso Guajardo told reporters before entering the offices of US trade representative Robert Lighthizer for Nafta talks. A spokesperson for Lighthizer’s office said there was no deal yet and that "major issues" are still outstanding.

The Mexican peso rose against the dollar after Guajardo’s comments.

Since restarting last month, the talks have focused on settling differences between Mexico and the US that go to the heart of US President Donald Trump’s complaint that Nafta has hollowed out US manufacturing to Mexico’s benefit.

Trump has threatened to dump the 24-year-old accord if it is not reworked to the advantage of the US. He hopes to reduce the US trade deficit with lower-cost Mexico and claw back jobs, particularly in the automotive industry. Although progress has been made on the automotive question in recent weeks, other issues, including a US proposal that could kill Nafta after five years, remain unresolved.

Guajardo’s comments were echoed by Jesús Seade, designated chief negotiator of Mexican President-elect Andrés Manuel López Obrador, who said the two sides are making "good progress" and that talks could conclude "in the coming hours". Canada has been waiting for the Mexican and US teams to reach common ground on vehicles before rejoining the negotiations.

US and Mexican officials say they will push for a deal on reworking automotive industry rules that could open the door for Canada to return to negotiations soon. Guajardo said the talks look to resolve the key issues so Canada can rejoin the talks. How quickly Canada returns to the table depends on the progress made in Wednesday’s talks, he said. A Canadian government source said on Tuesday there was nothing to report yet on Canada’s return.

Talks to rework Nafta, which underpins the bulk of foreign trade in North America, have ground on for more than a year. Discussions stalled ahead of the July 1 Mexican election as negotiators failed to make a decisive breakthrough.

Aside from vehicles, the three sides have yet to agree on future dispute resolution mechanisms, while Mexico and Canada also oppose a US demand to introduce a "sunset clause" that would force a renegotiation of Nafta every five years. Mexico and Canada fear a sunset clause could be a major hindrance on long-term investment.

Reuters