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Preliminary Nafta Deal Won’t Be Ready In Time For Pan-American Summit

Courtesy of ZeroHedge. View original post here.

The three ministers responsible for representing their respective countries during the seemingly never-ending Nafta talks (what round of talks is this, anyway? Third? Fourth? We forget…) met in Washington on Friday for a last-minute push toward the elusive “agreement in principle” that President Trump had hoped to unveil at this week’s pan-American summit in Lima, Peru.

However, despite the White House’s willingness to cave on one of its most controversial demands pertaining to automobile tariffs, the three sides once again failed to come to a consensus regarding the broad strokes of the deal. Now, Reuters is reporting that – while significant progress has been made this week – talks between the three countries aren’t advanced enough for a big announcement at this week’s summit, according to two people familiar with the discussions.

Talks to rework the North American Free Trade Agreement (NAFTA) are not advanced enough for the United States, Mexico and Canada to announce a deal “in principle” at this month’s Summit of the Americas in Lima, according to two people familiar with matter.

The ministers responsible for NAFTA met on Friday in Washington, and said progress had been made on reworking the accord.

But there was still too much to do unveil an agreement at the April 13-14 summit, the sources said, speaking on condition of anonymity due to the sensitivity of the matter.

U.S. President Donald Trump, his Mexican counterpart Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau are due to attend the Lima gathering, and officials have held out hope for substantive progress on the renegotiation before the meeting.

Spokespeople for the Mexican economy ministry and Canada’s foreign ministry declined to comment. A spokeswoman for the office of US Trade Representative Robert Lighthizer did not respond to a request for comment on Sunday.

Of course, this isn’t the first time the White House has hinted at the possibility of a breakthrough, only for it to swiftly be made apparent that the three sides remain about as far apart as they’ve ever been.

Lighthizer said last month that a deal would be forthcoming in the “next little bit.” However, his Mexican and Canadian counterparts have been much more circumspect.

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Trump said Thursday that the three sides were “very hard” on NAFTA and that he expected to have “something … fairly soon.”

During a tax roundtable in West Virginia last week, Trump said he told his negotiating team that there was “no rush” to come to an agreement.

“I said ‘Don’t rush it, take it nice and easy, there’s no rush, we get it done right or we’ll terminate it.’”

However, Trump’s easygoing words belie what Reuters describes as a frantic push to cobble together a deal to preserve Nafta now that the US has embarked on an escalating tit-for-tat trade war with China. White House officials – and the president in particular – are worried about the repercussions for businesses and markets should Nafta collapse and China hold its ground.

However, with the Trump administration embarking on a tariff conflict with China, officials say Washington is now in a hurry to reach a deal over NAFTA before the current Congress ends. The United States holds mid-term congressional elections in November.

Much of the debate centers on drawing up new rules for the automotive sector, with the United States eager to broker a revised NAFTA that secures it a bigger chunk of that business.

Having first demanded new rules stipulating that 50 percent of automotive content under NAFTA must be from the United States, Trump’s negotiators have changed tack and are now pushing a plan to try to ensure that a certain percentage of work in the industry is sourced from “high salary” areas.

Such a deal could squeeze Mexico and send more work to the United States and Canada, where wages are much higher.

Drawing up new automotive sector rules continues to present a major challenge at the talks, one of the sources said.

Canadian Foreign Minister Chrystia Freeland said Wednesday that “promising” progress had been made by the three sides on the auto issue.

“We’re making good progress,” she said. “Having said that, we’re not there yet.”

The news had little impact on the Mexican peso – typically the most sensitive to Nafta-related news – which was mostly rangebound.

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However, the Loonie was weaker in early, admittedly illiquid trading…


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