Time running out for Nafta talks, set to be extended

Time running out for Nafta talks, set to be extended

Time running out for Nafta talks, set to be extended

Experts at the Sourcing Summit, an apparel industry conference in Manhattan, echoed retailers' concerns that the USA could withdraw from Nafta or the deal could fall apart.

Critics say this has allowed manufacturers to use NAFTA to get around US import taxes while doing a substantial amount of manufacturing in China and other countries outside North America.

Government officials from Canada and Mexico slammed the Trump administration's proposals to renegotiate NAFTA in front of the top US trade negotiator on Tuesday.

"As hard as this has been, we have seen no indication that our partners are willing to make any changes that will result in a rebalancing and a reduction in these huge trade deficits", said Washington's negotiator, Robert Lighthizer.

"The exchange rate reflects different kinds of uncertainties, many of which we can not control, such as the normalization process of interest rates in the United States", said Meade, speaking at an event in Mexico City.

Washington's demands, previously identified as red lines by its neighbors, include forcing renegotiating the pact every five years, reserving the lion's share of automotive manufacturing for the United States and making it easier to pursue import barriers against some Canadian and Mexican goods.

Canadian and Mexican officials rejected some US proposals introduced during the latest round, according to one government source from each country. Guajardo, Mexico's top negotiator, had already made his opposition clear to the other proposal on auto production. Nafta now lets manufacturers - such as garment makers - create cross-border supply chains in which parts of a final product are sourced from different countries before being assembled in a final location. The U.S. also proposed that half of the parts that come from North America must originate from the United States.

The Mexican source would not comment on rules of origin. Critics say it would create too much uncertainty for foreign investment.

One of these sources said that the request included an adaptation period to gradually allow access to the market, at the rate of 5 % per year. "Because of its complex supply chains that cross both borders, the auto industry would suffer the most, with autos accounting for almost 40% of exports to Canada and 22% of exports to Mexico".

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