NAFTA negotiating teams will keep bargaining through the weekend in a rush to get a deal by early May, fuelled by a Trump administration desire to meet a legislative deadline.
Those teams kept talking while their political masters leading the process left Washington on Friday, with plans to reconvene there early next week.
“You can call this a perpetual negotiating round,” Foreign Affairs Minister Chrystia Freeland said, before departing for the weekend. “We have had some very energetic and productive conversations.”
She and her Mexican colleague are both rejecting the idea of deadline pressure, insisting there is no requirement to get everything done by some specific date: “It will take as long as it takes to get a great win-win deal,” Freeland said.
But the Trump administration has political reasons to hurry. There are just weeks left to meet the legislative deadlines for ratifying a deal in the U.S. Congress this year.
The administration is keen to have the agreement ratified under the current, friendlier, Republican-led Congress, as polls show a potential transfer in power after the November midterms.
The White House has been weighing different hardball tactics to force the Congress to move quickly on ratification and one involves a dramatic threat to cancel the existing NAFTA if lawmakers don’t approve the new one.
That carrot-and-stick tactic would be extremely high-risk, said Phil Levy, a former trade economist for George W. Bush and a senior fellow at the Chicago Council on Global Affairs.
It would see U.S. President Donald Trump invoke the six-month termination clause allowing a president to later pull out of NAFTA and let that risk hang over lawmakers as they deliberate over the new agreement.
It’s a strategy Trump has tried before on immigration, so far without success — he cancelled an executive order granting clemency to young migrants and pressed Congress to restore that clemency in a more comprehensive immigration law, which has not happened.
“The administration does not appear to have thought through a viable conclusion for its NAFTA strategy,” Levy said Friday.
Another possibility rumoured to be under discussion is Trump revising NAFTA by executive order. Other governments have done it in the past — the agreement actually lets them tinker with several important details, namely automobile rules of origin.
And auto changes are actually the centrepiece of the new pact, Freeland said.
Sources say negotiators are extremely close to an agreement on that issue and are now discussing fine details, like whether to require that a certain percentage of a car be produced by workers making $15 an hour, $16, or a varying range between $16-19, or whether that dollar threshold should be a median of wages in all three countries.
However, Mexico’s Ildefonso Guajardo dismissed the idea that a new NAFTA will be just about cars.
“No, no, no,” he said.
“There is no sense to modernize the NAFTA, to upgrade the NAFTA, if it’s not based on what you have built in the original one plus new items that have to be (added) according to modernity and the new economy.”
He said negotiators are well advanced in adjustments to telecommunications, energy and digital trade rules.