Even though House Speaker Paul Ryan, R-Wis., targeted May 17 as a deadline for a deal to be struck on the updated North American Free Trade Agreement, the date came and went without a deal.
Ryan set the deadline because, under Trade Promotion Authority law, Congress would need the deal to be done in May if this session of Congress is to pass a new NAFTA agreement before November elections. The three countries were talking in mid-May but a deal was not extremely close, sources said.
Despite the missed deadline, one source close to the negotiations for Mexico, speaking on background, said Mexican officials are still committed to continue the negotiations.
The source said the U.S. may try to use June 1 as another deadline to wrap up talks. Mexico and Canada are temporarily exempt from steel and aluminum tariffs through that date. If the U.S. slaps tariffs on Mexican steel and aluminum, the source said Mexico will respond.
Mexico would consider the steel and aluminum tariffs to be arbitrary and would retaliate against U.S. imports, the source said.
The perspective of the Mexican negotiators is that the U.S. is not making the concessions that they should.
Mexico has a presidential election in July. All candidates have expressed support for continued participation in NAFTA. The election may result in a delay in a NAFTA deal, but the source said none of the candidates advocate that Mexico leaves NAFTA.
Major sticking points for Mexican officials, according to the source, is the U.S. position on investor-state dispute settlement and the U.S.-favored sunset clause, which would require the three countries to revisit the agreement every five years.
Mexican negotiators, according to the source, also will not sign an agreement that includes a seasonal trade protection provision, a trade remedy favored by many southeast U.S. growers and others.
NAFTA talks also were hung up on automobile rules relating to the origin of vehicle parts, said Richard Owen, vice president of global membership and engagement at the Produce Marketing Association. Ryan might find a way to push the deadline to late May or early June, but other hard issues remain, including the sunset provision and the seasonal perishable trade protection proposal. Both of those issues are “non-starters” for Mexico, he said.
Owen said Trump might again threaten to pull out of NAFTA, but he said he wasn’t sure that added pressure would help negotiators get a deal faster.