Mexican Official Hopeful Bilateral NAFTA Issues Will Be Resolved by Middle of Next Week

Mexico's Economy Minister Ildefonso Guajardo said he's hopeful the U.S. and Mexico "will be able to close up no later than the middle of the week the remaining issues" on their NAFTA renegotiations and that trilateral discussions would then start. As to what those remaining issues are, Guajardo spoke elliptically, as he left the Office of the U.S. Trade Representative on Aug. 17, about government actions that are connected with "financial items" -- but he did clarify this does not concern trade in the financial sector.

He said the two sides discussed how the transition period to new rules of origin for autos would be handled. "I'm now going to join stakeholders. There are some elements that are landing just as we speak in terms of the analysis of the sector, and how we frame the commitments that are possibly going to be made." Guajardo said the teams are making "a lot of progress." Guajardo and his team will return to Washington on Aug. 21; technical talks around those "financial items" will take place Aug. 20, he said.

U.S. Trade Representative Robert Lighthizer said on Aug. 16 he's hopeful that the U.S. and Mexican negotiating teams will have "a breakthrough" in the next several days. "There's still some difficult issues to work on. Those are always hard at the end," he said at the start of a Cabinet meeting that was open to the press on Aug. 16. Lighthizer was speaking in between morning and afternoon negotiating sessions with Guajardo.

President Donald Trump interrupted and said, "If you don't have breakthrough, as you call it, don't do the deal -- because it's a lousy situation for the United States. We have much better alternatives than that." Trump said he tells Lighthizer every day if he can't make the right deal, don't make it. Lighthizer said, to laughter in the room, that it's true that Trump tells him that every day. But then he said he thinks the best path in this case may be getting a good agreement.

When asked about a breakthrough, Guajardo said a breakthrough doesn't come in until everything is finished. The sides still haven't discussed the sunset clause, he noted. The sunset clause is a deal breaker for both Canada and Mexico, and Canadian Ambassador David MacNaughton reiterated that last week in a Bloomberg interview, "There are still some bilateral issues between Canada and the U.S. and between the U.S. and Mexico that need to be resolved outside of autos, but if the auto thing gets resolved then I think we’re well on our way to a successful modernization," MacNaughton said.

"I'm hopeful with Mexico. And then I hope once we get one with Mexico, that Canada will come along," Lighthizer said during the Cabinet meeting. "So I feel reasonably good about that." Trump responded to Lighthizer and the rest of the gathering: "We're not negotiating with Canada right now. Their tariffs are too high. Their barriers are too strong. So we're not even talking to them right now. But we'll see how that works out. It will only work out to our favor."