Mexican Economy Minister Ildefonso Guajardo said that trade negotiators from U.S and Mexico will resume talks on Monday in Washington, to continue to find a common position on the North American Free Trade Agreement (NAFTA).
NAFTA is a treaty— free trade agreement between Canada, Mexico and the United States. The three nations agreed to remove tariffs on imports and exports to enhance investment opportunities.
In January 2017, President Donald Trump signed and released an executive order to renegotiate NAFTA because he prefers bilateral agreements over multilateral ones.
Mexico-U.S talks are focused on the revision of rules for the automotive industry which the U.S President is persistently pursuing because he believes that the 24 year old treaty is not advantageous to American workers.
He also wants Mexico to lessen its value added tax and put an end to the maquiladora program.
Canada has opted to sit out the latter part of the year-long discussions but once it rejoins the talks, the three nations would need another week to assess and work together.
Mexican Foreign Minister Luis Videgaray stated that Canada would return once bilateral issues were resolved.
An industry source claims that the two sides are nearing agreement on the automotive industry rules, whereby the regional automotive content threshold for tariff-free access under NAFTA will be raised to around 75 % from 62.5 %.
The Trump administration has been insistent on imposing a cap on Mexican auto and SUV exports to the United States that will be sent duty-free or at a 2.5 % tariff which has further complicated the ongoing talks.
Trump said on Saturday that the United States and Mexico could reach a “big Trade Agreement” as soon as the incoming trade negotiator indicated that possible new approach on NAFTA energy rules and US “sunset clause” demand.
Trump tweeted “U.S relationship with Mexico is getting closer by the hour. Some really good people within both the new and old government, and all working closely together….A big Trade Agreement with Mexico could be happening soon!”