Lighthizer points to possible NAFTA deal by the end of August

U.S. Trade Representative Robert Lighthizer on Thursday expressed optimism that a deal in principle can be reached on an updated North American Free Trade Agreement (NAFTA) by the end of August.

Lighthizer shed some light on the hazy future of negotiations on the 24-year-old deal saying that if Mexican President Enrique Pena Nieto wants to sign a deal before he leaves office on Dec. 1 then the countries must complete work by the end of next month. next month.

{mosads}”You’re probably looking at having to have some conclusion during the course of August, and my sense is that that’s not an unreasonable time frame if everybody wants to get it done,” Lighthizer told a Senate Appropriations subcommittee.

Lighthizer told the committee that the trading partners are “close to a point where we’re going to have that finished.”

U.S. trade law requires a waiting period of 90 days after an agreement is reached before the nations can sign a pact. 

If the countries can’t reach a deal by the end of August, the talks and the signing would be passed on to incoming Mexican president, Andres Manuel Lopez Obrado.

After two months of relative quiet on the NAFTA front — Mexico held an election for a new president — Mexican Economy Secretary Ildefonso Guajardo and Lighthizer are meeting on Wednesday to formally resume the talks.

The first question is whether the U.S., Mexico and Canada will all stick together in the NAFTA deal. 

President Trump has recently floated the idea that the U.S. and Mexico were going to reach a bilateral deal first. But Canada and Mexico oppose that plan and want the deal to remain three-nation agreement.

Lighthizer wasn’t clear about whether Canada would be in the final mix.

“My hope is that we will before very long have a conclusion with respect to Mexico and that, as a result of that, Canada will come in and begin to compromise,” he said.

“I don’t believe that they’ve compromised in the same way the United States has or Mexico has.”

But the Trump administration has their work cut out for them on Capitol Hill, too. 

Sen. Lamar Alexander (R-Tenn.) told Lighthizer during the hearing that “there are a substantial number of Republicans, including me, who are not likely to vote for any new NAFTA agreement that includes a sunset clause because we don’t think it is worth anything.”

Lighthizer has pushed for a five-year sunset clause that Mexico and Canada and the U.S. business community have refused to endorse.

The sunset clause was among several issues, including automotive rules of origin and the investor-state dispute settlement system that stalled the talks in May.