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US And Mexico On The Brink Of New NAFTA Deal

REUTERS/Edgard Garrido

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Jason Hopkins Immigration and politics reporter
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After negotiating throughout the weekend, U.S. and Mexican trade officials say they are on the brink of reaching new terms for the North American Free Trade Agreement (NAFTA).

“I would say that we’re practically in the final hours of this negotiation,” Mexican Economy Minister Ildefonso Guajardo told reporters Sunday, shortly before entering into talks with U.S. Trade Representative Robert Lighthizer. The discussions have revolved around new rules for the automotive industry, terms President Donald Trump has long argued are unfair for Americans.

The Trump administration is angling to impose a cap on car and SUV exports from Mexico to the U.S. that could be shipped duty-free or at a 2.5 percent tariff, a proposal that is garnering pushback from Mexican officials. The request aims to establish a cap of around 2 million Mexican car and SUV exports. As background, the Latin American country exports more than 2.3 million vehicles to the U.S. in 2017.

Another major hurdle to reach will be on the topic of energy. Mexico’s current administration agreed to open up its oil and gas sector to private investment, which included major U.S. companies, but Mexico’s incoming president has stood opposed to these reforms and does not want to enshrine them in the new NAFTA deal. (RELATED: Trump Closing In On NAFTA Deal?)

The Trump administration has also sought a controversial “sunset clause” for NAFTA, allowing for subsequent deliberations. However, U.S. officials have since walked back those demands.

The other NAFTA member, Canada, is waiting until the U.S. and Mexico are finished hashing out details before jumping into talks.

The recent headway follows five weeks of NAFTA negotiations. People close to the discussions believe a deal could be reached as soon as Monday.

The U.S., Canada and Mexico want to reach a new NAFTA agreement before the arrival of incoming Mexican President Andrés Manuel López Obrador, a left-wing politician who has been critical of the new NAFTA talks. López Obrador does not enter office until Dec. 1, but negotiators are required to wait 90 days after reaching an agreement before they can sign a new pact — hence the sense of urgency.

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