Wednesday, October 18, 2017

Foundering NAFTA talks get an extension

Canada, the U.S. and Mexico have agreed to take a break from contentious talks to renegotiate the North American Free Trade Agreement. "Negotiators, struggling to find agreement on some of the thorniest provisions of the trade deal, will take an extended break to consult with politicians and interest groups before convening again in Mexico City for the fifth round of talks in mid-November. The trade talks, which were supposed to wrap up by year-end, have now been extended into the first quarter of 2018, the parties said," Ana Swanson reports for The New York Times.

That's not necessarily good news for pro-NAFTA parties. Upcoming elections in all three countries could influence candidates to take hard-line stances on the trade deal, making an agreement even less likely. The Mexican presidential election will take place July 1, Canada will hold provincial elections through the fall and early winter of 2018, and the U.S. will hold midterm elections Nov. 6.

Another possible wrench in the works: "In the United States, legislation will expire in July that gives the Trump administration more extensive authority to negotiate trade deals and then submit them to Congress for a simple up or down vote, without amendments," Swanson reports. If that legislation, called Trade Promotion Authority, is not renewed, Secretary of Commerce Wilbur Ross told a conference last week that he doesn't think a NAFTA deal will be possible.

"The demise of NAFTA, a deal that has knit together the North American economy over the last quarter century, would be a heavy blow to all three economies. A new study by Impactecon, an American consulting firm, found that the United States would lose 256,000 net jobs if it withdrew from NAFTA, with the most severe impact on low-wage employment. Mexico would lose 951,000 net jobs, and Canada 125,000, the report projected," Swanson reports. "The outcome could also damage the North American security relationship, straining cooperation to combat money-laundering, terrorism, the drug trade and undocumented migrants coming through Central America, the report said."

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