Canada’s foreign minister travels to US for NAFTA talks

Ottawa (AFP) – Canadian Foreign Minister Chrystia Freeland will be in Washington on Thursday and Friday to join in talks on renegotiating the North American Free Trade Agreement, according to her office.

The announcement came as Freeland on Wednesday said that negotiators “are making some good progress” in overhauling the 24 year-old trade agreement between Canada, Mexico and the United States.

Freeland said that in March she had “a good meeting” with US President Donald Trump’s chief trade negotiator, Trade Representative Robert Lighthizer.

At that time “we made some progress on the rules of origin for autos, which in my view is … the most fiendishly complex” aspect of the deal as well, as “the heart” of the trade agreement.

Under the current agreement, 62.5 percent of the content of a vehicle must be produced within the NAFTA countries to move duty-free across borders.

Washington wants to bump this requirement up to 85 percent, with 50 percent of US origin — a proposal that Ottawa and Mexico City have rejected.

US officials have not confirmed a Canadian media report that US negotiators have dropped this demand.

Trump has blamed NAFTA for a loss of jobs in the United States, especially of auto assembly jobs that moved to lower-wage Mexico.

In Washington, Freeland will meet with Lighthizer, who on Wednesday met Mexican Economy Minister Ildefonso Guajardo.

Several stumbling blocks remain to be resolved in talks that began nearly eight months ago between the trade partners.

The Trump administration is increasing pressure to quickly reach a new trade deal at time when uncertainties about cross-border commerce are weighing on Wall Street.

The political calendars in Mexico and the United States however do not favor reaching a quick resolution.

July’s presidential elections in Mexico and November’s mid-term US congressional elections mean that negotiators may have even less room to maneuver.

In Washington, the White House must also contend with market jitters, as Trump’s new import tariffs on metals and Chinese-made goods have sent stocks tumbling in recent weeks.