Nafta ‘handshake’ deal with Mexico targeted for Thursday

Officials are expected to announce that the US and Mexico have made enough progress on various two-way issues to be able to announce what one source described as a ‘handshake’ deal

PUBLISHED : Thursday, 23 August, 2018, 3:43am
UPDATED : Thursday, 23 August, 2018, 4:39am

This story is published in a content partnership with POLITICO. It was originally reported by Megan Cassella and Sabrina Rodriguez on on August 21, 2018.

The Trump administration is planning to formally announce on Thursday that it has reached a breakthrough in Nafta talks with Mexico, clearing the way for Canada to rejoin negotiations to modernise the free trade pact, three sources close to the talks told POLITICO.

The sources said that time has been cleared on the White House schedule for the announcement, where President Donald Trump is expected to be in attendance. Officials are expected to announce that the US and Mexico, which have been meeting together for the last several weeks, have made enough progress on various two-way issues to be able to announce what one source described as a “handshake” deal.

The announcement is also expected to include details of when Canadian officials will be returning to Washington to resume talks with the other two nations. It will likely be a US-only announcement rather than one made alongside Mexican officials, who are eager to close bilateral talks but wary of making any formal announcement before Canada is in, one of the sources said.

The sources cautioned that the schedule could change before Thursday. Whether the announcement moves forward as planned could depend on how a high-level meeting scheduled for Wednesday goes between US Trade Representative Robert Lighthizer and Mexican Economy Secretary Ildefonso Guajardo.

But putting an announcement on the White House calendar shows that administration officials are bullish on their prospects of working out any remaining issues with Mexico in the next couple of days. Mexico has for weeks been pressing to wrap up at least a preliminary deal by August 25 in order for current President Enrique Pena Nieto to have time to sign it before he leaves office December 1.

Neither the White House nor the Office of the US Trade Representative immediately responded to a request for comment Tuesday night.

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The US and Mexico have been focused primarily on negotiating contentious automotive rules that govern how much of a car must be sourced from within North America to qualify for reduced tariffs under Nafta. The US has been seeking to increase that threshold and to add new mandates requiring a certain percentage of each car be produced by workers earning at least US$16 an hour.

It was unclear as of Tuesday night where the two sides had come out on the issue, but sources told POLITICO last week that Mexico had agreed to accept stricter auto rules in exchange for the US dropping other controversial demands and leaving a chapter largely untouched that contains rules on disputes between governments.

Trump himself indicated at a rally in West Virginia Tuesday night that talks with Mexico were close to completion.

“We’re on our way with a good deal – a fair deal with Mexico,” he said.

Ian Kullgren contributed to this report.