NAFTA update talks become more intense

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Former homeland security secretary Janet Napolitano speaks during a discussion on the future of NAFTA and US-Mexico relations. AFP

OTTAWA (Reuters) – Talks to update the North American Free Trade Agreement intensified on Saturday although US negotiators looked set to once again withhold proposals for one of the Trump administration’s most challenging issues.

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Teams from the United States, Mexico and Canada kicked off the third of seven planned rounds of discussions in Ottawa amid warnings from trade experts that time was quickly running out to seal a deal by the end of the year as planned.

One key issue is the US desire to strengthen rules of origin for autos, which dictate how much of a vehicle’s components must originate from within North America to qualify for tax free status.

The American side did not mention a specific goal in the first two rounds and Canada’s chief NAFTA negotiator on Saturday said he did not think the United States would provide more details during the Ottawa round.

“We’re not expecting that, no,” Steve Verheul told reporters, predicting the pace of the talks would nonetheless quicken.

According to a schedule of the talks obtained by Reuters, rules of origin will be discussed tomorrow and Wednesday.

President Donald Trump wants more US content in autos, citing trade deficits of $64 billion with Mexico and $11 billion with Canada. Mr Trump, who says NAFTA is weighted against his country, has threatened to walk away from the agreement.

Flavio Volpe, president of the Canadian Automotive Parts Manufacturers’ Association, said late on Friday he felt it was too early for detailed rule of origin proposals given that US officials were still talking to the domestic industry.

“It’s fine for us if they take a little longer so we all understand what our interests are and we make the right deal. We don’t need an early deal,” he said.

US chief negotiator John Melle said ahead of the talks that his team would introduce the difficult provisions in Ottawa talks that are due to last for five days.

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