The administration of U.S. President Donald Trump has emphasized the renegotiation of NAFTA in its drive to rework international trade pacts to the benefit of the United States. Since August 2017, the United States, Canada, and Mexico have made slow, often contentious progress toward an agreement. However, Washington appears to still prefer a deal to be struck as soon as possible, though extensive disagreements hinder negotiations.
After more than six months of NAFTA negotiations, the White House wants something to show for it. According to an April 3 report, the U.S. administration is working to hammer out a preliminary agreement in less than two weeks, when President Donald Trump will attend the Summit of the Americas in Lima, Peru. But a wide gulf divides Canada, the United States and Mexico on key aspects of the trade deal. If the Trump administration has anything to show at the April 13 summit, it will be only a preliminary agreement without consensus on the truly contentious points of the renegotiated pact. But for the White House, that may be enough, because it is looking for a political win ahead of the U.S. midterm elections.
In the talks to update the North American Free Trade Agreement, negotiators from Canada, the United States and Mexico have made some headway. They have reached agreement on six of the deal's 30 chapters under discussion. However, these agreements all cover less controversial topics, including sanitary standards for agricultural goods, regulatory practices, transparency, anti-corruption and the treatment of small and medium enterprises. The tough subjects — which could make or break the deal — are still undecided. These include rules-of-origin requirements for the automotive sector, a dispute-settlement panel for businesses, labor standards and a sunset clause allowing periodic review of the the treaty. All of these issues are vital, and Ottawa, Washington and Mexico City do not appear close to agreement on any of them.
From the point of view of the Trump administration, speeding the deal along makes good domestic political sense. The midterm elections are coming, and even a preliminary deal could help bolster the Republican Party. However, the administration is facing another sticking point: Congress needs 180-day notice of changes to NAFTA before it can approve those modifications. That means that a deal approved in April can't clear Congress by the end of the year. So the Trump administration will probably end up touting a preliminary deal and plans for continuing talks ahead of the U.S. elections and at the Peru summit.