5th Round Of NAFTA Talks Collapse: Who's To Blame? What's At Stake?

The 5th round of NAFTA talks between the US, Canada, and Mexico was a complete disaster. It’s a lose, lose, lose setup.

A major warning sign of an impending NAFTA talk failure came when the Trump administration updated its NAFTA demands despite the fact that negotiations had already bogged down.

U.S. officials explicitly stated, for example, that it would work to eliminate “unjustified measures” limiting U.S. dairy products’ access to Canadian markets.

Canada disputes the US position while accusing the US of the same thing. The US is also moaning about Canadian lumber.

Finally, Trump wants NAFTA to end in 5 years unless all three nations get together to extend it.

Talks End, Progress Negative

On November 21, the New York Times reported Nafta Round Closes With Talks Bogged Down by Conflict.

Robert Lighthizer, the United States trade representative, blamed his Canadian and Mexican counterparts.

“Thus far, we have seen no evidence that Canada or Mexico are willing to seriously engage on provisions that will lead to a rebalanced agreement. Absent rebalancing, we will not reach a satisfactory result,” said Lighthizer.

New Rules of Origin

Rules of origin, govern the amount of a good that needs to be manufactured in North America in order to qualify for zero tariffs. The US wants to raise the threshold for the automobile industry to 85 percent, up from 62.5 percent previously.

The US seeks a new requirement that half of a car be manufactured solely in the United States — a provision at odds with the wishes of American automakers, who fear it will drive up their costs and make them less competitive globally.

Canadian and Mexican officials did not make counterproposals to US requests on rules of origin.

Instead, they presented data showing the harm the proposition would inflict on the auto sector and pressed the United States.

This infuriated team Trump despite the fact that US manufacturers do not even want such rules.