US makes tough NAFTA demands

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US President Donald Trump has been very critical of NAFTA. AFP

ARLINGTON, Va. (Reuters) – Lobbying efforts on the North American Free Trade Agreement hit a crucial stage this week after the Trump administration ignored the US business community’s advice and pitched proposals to radically reshape NAFTA, leaving its future in doubt.

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The US demands to force renegotiations of NAFTA every five years and reserve the lion’s share of automotive manufacturing for the United States have cast a pall over a fourth round of talks due to end yesterday in suburban Washington.

Though they were widely expected, the aggressive US proposals were met with dismay by many officials from Mexico, Canada and US industry, who have formed a loose alliance in opposing major changes to NAFTA.

By Monday, Mexico’s peso had hit a near five-month low with fears growing about the future of the deal underpinning $1.2 trillion in annual trade between the three countries.

US opposition to NAFTA’s dispute resolution mechanisms, plans to restrict outside access to government contracts and attacks on Canadian dairy and softwood lumber producers have further stoked the grim mood among trade officials.

Bosco de la Vega, head of Mexico’s National Agricultural Council, the country’s main farming lobby, said coming weeks would show whether Mexico and Canada’s allies in Congress and the US private sector could push back against the proposals. “We’re going to see what the people here are made of,” he said. “What I can guarantee you is that Mexico won’t agree to a bad deal.”

Officials from the two biggest US export markets have spent the months since Mr Trump’s November election victory working on US bosses and political leaders to defend NAFTA.

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