A second round of talks on re-negotiating the North American Free Trade Agreement began Friday with officials expressing optimism despite President Donald Trump’s suggestions he could withdraw the United States from the 23-year-old trade pact.
Delegations from the United States, Mexico and Canada gathered at a Mexico City hotel for discussions that the country’s Economy Department said would focus on issues such as rules-of-origin, electronic commerce, the environment and anti-corruption measures.
“There are conditions to negotiate, despite some statements,” said Gerardo Gutierrez Candiani, head of Mexico’s special economic zones agency.
On Wednesday, Trump said: “We’ve got to change this deal, and hopefully we can renegotiate it, but if we can’t we’ll terminate it and we’ll start all over again with a real deal.”
Among other things, Washington wants local-content rules tightened to avoid imports largely made in third countries from being considered “made in North America” just because they were assembled in Mexico.
Gutierrez Candiani said other issues on the table include labor standards and dispute resolution mechanisms. The United States also opposes the current system of private arbitration panels.
Gutierrez Candiani acknowledged that “they are not agile enough, and mechanisms have to be sought that are more agile, more reliable.”
The current agreement allows binational panels of private experts to decide differences, making it harder for one nation to unilaterally impose tariffs on another.
The United States wants to eliminate those panels, but Canada and Mexico fear that would allow it to throw its greater weight around and impose tariffs on imports that allegedly harm local producers or are being “dumped,” or sold below their real price.
Talks of more such tariffs drew concern from a newly formed alliance of U.S. and Canadian fruit and vegetable companies.
In a letter to the U.S. government Wednesday, the Produce Coalition for NAFTA said “the result will be more tariffs on fruits and vegetables … what is more, this provision will be used against U.S. growers.”
U.S. companies now frequently grow produce in Mexico in the winter or contract it from Mexican companies.
Mexico’s Economy Department said the five days of talks will be conducted in 25 working groups with an expected wrap-up date of Tuesday. The first round of talks took place in Washington in mid-August, and several more rounds are expected.