The US, Canada, and Mexico appear doomed to miss a key deadline for their massive trade deal
- House Speaker Paul Ryan set a Thursday deadline for a new North American Free Trade Agreement deal for Congress to vote on it this year.
- Trump administration officials, including Larry Kudlow and Commerce Secretary Wilbur Ross, were not optimistic that a deal would be reached in time.
- Key issues are still proving to be a thorn in negotiations among the US, Canada, and Mexico.
The US, Canada, and Mexico have just two days to meet a key North American Free Trade Agreement renegotiation deadline, and prospects of a deal are dwindling.
House Speaker Paul Ryan set a Thursday deadline for the Trump administration to send Congress an agreement in principle to vote on this year. After that point, Ryan said, the issue would be left up to the new Congress, which could look radically different than its current form.
If the deadline slipped, US Trade Representative Robert Lighthizer said the entire renegotiation would be on "thin ice."
But Trump administration officials don't sound optimistic on an agreement this week.
Commerce Secretary Wilbur Ross said Monday that all of the "hot topics" in the talks remained unresolved.
"The big topics like that are still a work in progress and those are very complex issues, particularly rules of origin," Ross said. "Eventually it will come down to every comma, every semicolon, everything before we can figure out if it's something that's workable."
Larry Kudlow, Trump's typically upbeat top economic adviser, said Tuesday that the chances of a new NAFTA deal were 51-49.
"That's not great for Kudlow optimism," he said at an event hosted by the news website Axios.
Perhaps most telling, the three key NAFTA negotiators - US Trade Representative Robert Lighthizer, Canadian Foreign Minister, and Mexican Economy Minister Ildefonso Guajardo - did not meet Monday.
Here's a rundown of the major issues still outstanding:
- Auto rules: The US is aiming to increase the percentage of a vehicle's parts that must come from a NAFTA nation for it to be shipped across borders duty-free. Additionally, the US wants to set higher wage standards for a car to be duty-free. Mexico is pushing back on both of these proposals.
- Sunset clause: The US wants to include a clause in the agreement that would force the three countries to reevaluate the deal every five years. Canada and Mexico are against the measure because they say it will increase economic uncertainty in their countries.
- Changes to the investor dispute settlement: NAFTA currently contains an investor dispute settlement system, which allows investors from one NAFTA country the ability to lodge a complaint against the government of another nation and go to arbitration. This is designed to protect investors from other nations seizing property or violating NAFTA's rules. In negotiations, Lighthizer pushed for the provision's removal. But many members of Congress - including Republicans - say the clause protects US businesses as well. Canada and Mexico are also against the system's elimination.
The end result this week could see the countries announce a narrower deal, with enough leeway to flesh out the other issues during the mandated congressional review period. But Ryan suggested lawmakers want a reasonably concrete deal to trigger the waiting period.