April 17, 2018 / 4:47 PM / 3 months ago

NAFTA officials set for Washington meeting to push for progress

OTTAWA (Reuters) - The top U.S., Canadian and Mexican officials driving NAFTA renegotiations will meet in Washington on Thursday, a Canadian government source said on Tuesday, as pressure for a quick deal mounted.

FILE PHOTO: U.S. Trade Representative Robert Lighthizer leaves the room next to Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo after a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico March 5, 2018. REUTERS/Edgard Garrido

Although the United States is eager to quickly wrap up negotiations to update the $1.2 trillion North American Free Trade Agreement, officials say several contentious issues must still be resolved.

U.S. Trade Representative Robert Lighthizer wants some kind of agreement in place before campaigning for a July 1 presidential election in Mexico gathers pace.

Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo last met on April 6.

Guajardo said on Monday the three officials might meet again this Thursday in Washington, and the Canadian government source confirmed the meeting would go ahead.

“It’s a continuation of the conversation they started on two weeks ago,” said the source, describing recent exchanges between the three nations as very productive.

Guajardo and others have said a NAFTA deal could be possible by early May, but significant differences remain on U.S. proposals to revise content rules for the automotive sector and to change dispute resolution mechanisms as well as other issues.

“I wouldn’t be expecting an announcement out of this meeting (on Thursday),” added the source, who requested anonymity given the sensitivity of the situation.

U.S. President Donald Trump, who blames NAFTA for job losses in the American manufacturing sector, regularly threatens to walk away from the pact unless major changes are made.

Trump and other U.S. politicians are also unhappy with the way Canada uses tariffs and export limits to protect the domestic dairy market. Four Republican Senators sent Freeland a letter on Tuesday urging her to reform the system.

“American dairy products face tariffs upward of 300 percent at the Canadian border, and U.S. farmers cannot fairly compete,” said Pat Toomey, Cory Gardner, Ron Johnson, and Michael Lee.

The Canadian tariffs are not formally part of NAFTA and Freeland has made clear Ottawa will defend the system.

Moises Kalach, head of the international negotiating arm of a business lobby which represents the Mexican private sector, said the three teams were working “night and day” to get a deal on the new auto sector rules.

To agree a new NAFTA, the U.S. team would need to show more flexibility, Kalach said in an interview. So far, Trump had not changed his attitude on the toughest issues, he added.

Additional reporting by Dave Graham in Mexico City; Editing by Alistair Bell and Sandra Maler

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