International Services Group

Sixth Round of NAFTA Talks Wraps Up with Some Progress

The sixth round of North American Free Trade Agreement (NAFTA) negotiations concluded in Montreal, Canada, on January 29, 2018. U.S. Trade Representative Robert Lighthizer voiced subtle optimism that some progress was made by closing a chapter on anti-corruption and discussing other core issues, but expressed general dismay at slow progress and tough challenges that still lie ahead to strike a new deal.

According to the closing statement delivered by Lighthizer, trade officials from Canada, Mexico, and the U.S. closed this round of NAFTA talks on a conciliatory note, with all three countries looking forward to making significantly more progress during the remaining two rounds scheduled before the March 31, 2018 deadline.

Although the NAFTA countries agreed to measures aimed at preventing corruption during the week-long round of negotiations, they were far from reaching an agreement on the topic of modifying rules of origin and calculating the regional content of the country in which automobiles are manufactured. In addition to the rules affecting the auto industry, other key issues (including resolving trade conflicts among the countries, the settlement of investor disputes, and a right to terminate versus revising NAFTA every five years) still leave substantial work for further negotiations during subsequent meetings.

The NAFTA renegotiations were originally scheduled to conclude in March this year to avoid conflicts with Mexico’s presidential race in July and the U.S. midterm elections in November. However, most trade experts now speculate that rounds of talks aimed at salvaging the $1.2 trillion free-trade pact will continue beyond the March deadline.

While President Trump has recently ramped up his trade efforts by levying tariffs on washing machines and solar panels mostly imported from Asian countries and eyeing additional measures against China, he has not spoken much lately on the status of NAFTA renegotiations. During the 2018 State of the Union Address, President Trump simply emphasized that trading relationships with the U.S. should be fair and reciprocal and that they should protect American workers and intellectual property rights.

With significant changes to NAFTA looming, it is critical for companies with U.S., Mexican and Canadian international business interests to stay informed. We will continue to closely monitor the Trump Administration’s progress on the renegotiation of NAFTA and provide timely updates.

For more information regarding NAFTA or other free trade agreements, please contact Jan de Beer, Katherine Berkley or Chanhee Han on Frost Brown Todd’s International Trade Compliance Service Team.

(This article was originally published and distributed as an FBT Legal Update.)

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Attorney Spotlight

Joseph J. Dehner Joe Dehner concentrates his practice on multinational business and securities disputes. He counsels a wide variety of companies, domestic and foreign, on issues confronting global business, including transnational investment, mergers and acquisitions, joint ventures, customs and trade issues, international business structures, distribution and agency agreements and the resolution of international disputes.