Lighthizer Aiming for Nafta Deal in May as Talks Gather Pace

(Bloomberg) -- U.S. Trade Representative Robert Lighthizer said he wants to reach a deal in coming weeks to revamp the North American Free Trade Agreement, adding a sense of urgency to trilateral negotiations that have run for over eight months.

Lighthizer is scheduled to meet with his Mexican and Canadian counterparts on Monday after he returns from a trip to China. The three have been holding regular talks since August, and last week gathered in Washington for several days of negotiations. While Canada's government highlighted a series of major sticking points that still remain in a call with stakeholders Tuesday, Lighthizer struck an upbeat tone.

“We're going to meet again on Monday, and we'll see if we can get a good agreement,” Lighthizer said during a conference in Washington on Tuesday. “I'd like to get it done a week or two after that. If not, then you start having a problem.”

That's because by law it could take the House and Senate months to ratify any changes to Nafta. The U.S. holds congressional elections in November and a new Congress starts up in January. Waiting until then “changes the whole way you have to kind of construct the deal,” he said.

Broad Support

Lighthizer said he's aiming for an agreement that will have broad support in the current Congress, with at least 65 percent of the Senate and House approving the deal. “It's my ambition that this not be a Republican vote,” he said. “It's got to be a bipartisan vote. We want to have a big vote.”

Lighthizer's push to hammer out a deal could bump into a difficult reality, as the three countries still haven't agreed on thorny issues such as rules for car manufacturing in the region. President Trump has threatened to withdraw from Nafta if he can't make changes to shrink America's trade deficit and revive manufacturing jobs.

Meanwhile, Canada looks to be warning a deal isn't imminent. The country's deputy chief Nafta negotiator, Martin Moen, privately briefed stakeholders Tuesday and cited divides on a series of core issues, such as U.S. demands for a sunset clause, government procurement and agriculture, according to a summary published online by the Canadian Association of Railway Suppliers. “There does not appear to be a noticeable progress for a quick resolution of the outstanding issues,” the summary said. The rail group didn't immediately respond to requests for comment.

A spokesman for Canadian Foreign Minister Chrystia Freeland declined to comment on a stakeholder account of the call and referred to the minister's remarks earlier in the day, when she said good progress had been made in talks, particularly on the crucial issue of the auto sector.

These Are Five Sticking Points to a New Nafta Deal

Speaking earlier on Tuesday, Commerce Secretary Wilbur Ross cautioned there's a risk Nafta negotiations could drag on for months.

The three countries could reach a deal in the next few weeks, “or it will take until fall, and who knows what happens then,” according to Ross, who is frequently engaged in the White House's decisions on trade. “As you move toward the middle of the year, the political calendar makes it difficult,” he said at a conference in Los Angeles, citing Mexico's presidential vote in July.

Intensive Stage

But the pace of Nafta negotiations has accelerated in the past few weeks. Freeland, Canada's lead minister, said in late April talks were in an intensive stage, with technical teams working long hours and weekends to get a deal done.

Still, Trump has expressed little urgency to reach an agreement and said last week he wasn't sure a quick deal would be in America's interests.

Since then, Trump on Monday extended temporary exemptions for Canada and Mexico from U.S. tariffs on steel and aluminum. Trump has said he would exclude both countries permanently if they agree to a Nafta accord to his liking. The new exemption expires June 1.

--With assistance from Christopher Palmeri Josh Wingrove and Frederic Tomesco

To contact the reporter on this story: Andrew Mayeda in Washington at amayeda@bloomberg.net.

To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Chris Fournier, Theophilos Argitis

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