High-level negotiators from the United States, Mexico and Canada failed to find common ground during Friday’s talks about the North American Free Trade Agreement (NAFTA), leaving analysts wondering whether an agreement will be reached before the May 17th deadline. The deadline, set by U.S. House of Representatives Speaker Paul Ryan, was chosen to give ample time for Congress to confirm the changes. However, Canadian Foreign Minister Chrystia Freeland would not commit to resolving the issues on Washington’s schedule. “The negotiation will take as long as it takes to get a good deal,” she told reporters on Friday after a short half-hour meeting.
U.S. Trade Representative Robert Lighthizer has placed some of the burden of the rush on Mexico whose elections are set for July 1, though Mexican Economy Minster Ildefonso Guajardo has said that “We’re not going to sacrifice the quality of an agreement because of pressure of time,”
Among the key hurdles that must be crossed in order to reach an agreement are issues surrounding what percentage of automobiles must be produced in North America and a “sunset clause” that would require NAFTA to be renegotiated every five years. U.S. On Friday, U.S. President Donald Trump said that NAFTA has been a “horrible, horrible disaster for this country.”
Analysts are concerned that mounting frustrations and continued criticisms will make it difficult for the open issues to be resolved in a satisfactory way. If the U.S. withdraws from NAFTA as President Trump has threatened, it could have significant impacts on international trade and thus on the currencies of participating countries.
North American nations aren’t the only ones feeling the pressure to resolve their trade differences. British Prime Minister Theresa May is facing trade troubles of her own as the UK prepares for Brexit. May has not yet determined whether the UK will remain in a customs union with the UK to help avoid tariffs and frustrating border delays. While remaining in a trade union may solve some problems, many consider it to be a sell-out. May has proposed a quasi-solution that would require the UK to levy tariffs on non-EU imports, a solution which has drawn much skepticism as the UK tries to build ties with non-EU countries. The UK’s exports to the EU have been steadily declining, and many have argued that the UK must find new countries to work with. Imposing tariffs on non-EU countries will directly contradict this goal.