MEXICO CITY, Oct. 1 (Xinhua) — Negotiations to modernize the North American Free Trade Agreement (NAFTA) will become thornier as talks progress, Mexico’s Senate said in a report released on Sunday.
As NAFTA members Mexico, the United States and Canada begin to tackle the more contentious issues, and the demand for concessions grows in order to preserve the two-decade trade deal, the negotiations will turn complex, lawmakers said.
Following the end of the third round of talks in Ottawa, “the negotiation will become increasingly more complicated,” with the three partners delving into the details in some 12 trade areas, the report said.
One of the toughest issues for Mexico will be labor regulations, the Senate noted.
Canada and the U.S are demanding Mexico raise workers’ wages to bring them more in line with North American standards. But Mexico is so far refusing to budge, since low pay is one of its industry’s major competitive advantages over its two partners.
Canada’s biggest private sector union has weighed in on the issue, saying that if Mexico doesn’t improve its labor standards, NAFTA should be ditched.
Mexico has been arguing that labor rights are a domestic matter.
“Mexico made clear its position to not give in to the demands of its partners in the sense of including binding commitments in the matter of labor policy in the text of the treaty,” senators said, in a statement no doubt designed to reassure the business sector.
Mexico is also wary of a U.S. initiative to draw up a list of agricultural products it aims to protect seasonally from NAFTA region imports.
“The proposal goes against Mexico and Canada’s shared goal to have the new regional agreement guarantee freer trade,” the senators said.
Mexico is also chafing at a U.S. proposal to change rules of origin, especially on autos and auto parts, so they include “higher NAFTA content and substantial U.S. content.”
In other areas, the U.S. wants to scrap the chapter on dispute resolution, which Mexico and Canada are in favor of retaining.
In addition, says the report, “there has been talk of significant differences, specifically between the U.S. and Canada, in relation to the aerospace industry.”
“Despite the challenges to be faced in upcoming rounds, the Mexican negotiating team will maintain its constructive stance and will not accept an agreement that fails to increase the opportunities for greater regional exchange,” lawmakers said.
Last week’s third round did see progress on several fronts, such as the inclusion of a chapter on small and medium-size businesses (SMBs), designed to boost the sector in the region.
Advances were also made in telecommunications, e-commerce, customs and other areas.
The fourth round is to take place from Oct. 11 to 15 in Washington.
Negotiations began on Aug. 16, on the insistence of U.S. President Donald Trump, who claims the trade agreement has hurt U.S. industry and employment, and unfairly benefited Mexico.