Mexican Ambassador Sees NAFTA Divisions Despite Progress in Talks

Disagreements are much wider this time around than they were in the early 1990s, when trade deal was first negotiated

Mexican Ambassador Gerónimo Gutiérrez Fernández said Tuesday there are still three major areas of disagreement in renegotiating a major trade deal between Mexico and the United States.

“It would be inappropriate for me to enter into specific[s] about the negotiations,” Gutiérrez said during at event at the Hudson Institute in Washington, D.C.

“There are three big baskets of issues. One of them — it’s no secret that the administration here, President Trump’s administration, has expressed his concern about the United States’ trade deficit. We beg to differ that is the way to measure success of a trade agreement. We have said that publicly, but nevertheless we recognize it’s an important item for the U.S. administration.”

The United States, Mexico and Canada forged the North American Free Trade Agreement (NAFTA) in 1994.

President Donald Trump has been working with partner countries to renegotiate the deal in a way that benefits domestic workers. But the talks have been fraught with disagreements and delays.

Related: How Mexico’s Election Uprising Could Sour NAFTA Talks

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“I wouldn’t be too worried about that; these are tough negotiations. Progress has been made,” Gutiérrez said. “There are issues that still remain. As compared to the early 1990s, when NAFTA was negotiated, there is far less of a policy alignment this time around among the NAFTA partners, and that makes the negotiation more difficult.”

Gutiérrez, who serves as ambassador of Mexico to the United States, discussed how negotiations have been going while speaking at the Hudson Institute. He highlighted three broad areas in which Mexico and the United States have had trouble agreeing, such as trade deficits, the governing of the agreement, such as a proposed sunset clause, and environmental and labor standards.

“There is another thing as part of the discussions that I would put in the governing part, the governing basket, which is the so-called sunset clause, which has been talked about. [It’s] this idea of a provision of ending the agreement automatically unless some action is taken,” Gutiérrez said.

“Mexico was very clear … We are not in favor of that clause, I expect a lot of discussions to take place in that regard. We have talked about — it makes sense to have a stronger review of the agreement every so often, four to five years, but the idea of a sunset clause in itself certainly is not something we believe would be helpful, and our Canadian friends to my knowledge seem to be in the same place.”

Related: The Massive Implications of the Impending NAFTA Deadlines

The three countries entered formal negotiations in August 2017 with the hope they’d have a finalized deal by that December. Trump has said he wants to shrink the trade deficit the United States has with trading partners and put a sunset clause on a new deal that would cause it to end unless renegotiated again. But partner countries have pushed back against those conditions.

“Finally, there is another basket that has to deal with labor and environmental standards,” Gutiérrez said. “When we did NAFTA 25 years ago and a lot has changed since then. First of all the environment is not as front and center as it is today. I think that the three sides agree can strength the provisions on the environment that were side agreements previously that will now come in the form of a formal agreement. And I think that there is basically a good consensus.”

Gutiérrez noted the Mexican government agrees that labor and environmental standards could be improved, but are still working through the details on how that should look. He adds that the incoming president, Andrés Manuel López Obrador, and his administration might find a lot of agreement on labor standards. Trump and Obrador are both economic populists who promise to put their countrymen first.

“The truth is Mexico is in favor of having better labor standards. We’ve had serious discussions about that.”

“And on labor standards, the concern is that we as a region should have better labor standards, more specifically Mexico,” Gutiérrez said. “The truth is Mexico is in favor of having better labor standards — we’ve had serious discussions about that.”

He added, “There was a reform that was pushed by President Peña Nieto in 2013-14 on the constitutional level, and now there is a secondary legislation that needs to pass that will strengthen labor standards. That will provide for more transparent union elections and procedures. We need unions. We don’t oppose that basic principle. I think that in my view that is an area you’d find the next administration will be willing to work.”

Obrador was highly critical of NAFTA throughout his campaign, much as Trump was. But after winning the election, he has since said he would respect the ongoing talks and hopes to forge a new trade deal that is good for Mexico. He will be assuming the presidency on December 1.

Connor Wolf covers Congress and national politics and can be reached at [email protected]. Follow him on Twitter.

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