NAFTA talks prolonged into 2018 amid sharp conflicts

WASHINGTON – 18 October 2017: Canada, the United States and Mexico on Tuesday said significant disagreements remained in talks to overhaul the North American Free Trade Agreement as they extended negotiations into 2018.

At a press conference in Washington, representatives of the three governments exchanged mutual accusations of intransigence and described "significant conceptual gaps" between them.

The outcome left the success of the talks in doubt, with President Donald Trump having repeatedly threatened to scrap the landmark regional trade pact.

Canadian Foreign Minister Chrystia Freeland took aim at US demands for changes to rules of origin, which allow autos and parts to cross borders duty-free under NAFTA.

"We've also seen a series of unconventional proposals in critical areas of the negotiations that make our work much more challenging," Freeland told a joint press conference in Washington.

Likewise, Mexican Finance Minister Ildefonso Guajardo Villarreal suggested Mexico had stretched as far as it could in making concessions.

"We must all understand that we have limits," he said. "We must ensure that the decisions that we make today do not come back to haunt us tomorrow."

US Trade Representative Robert Lighthizer accused Mexico and Canada of being unwilling to relinquish unfair advantages that he said broadened the $500 billion US global trade deficit.

"Frankly, I am surprised and disappointed by the resistance to change from our negotiating partners," Lighthizer said.

"As difficult has this been, we have seen no indication that our partners are willing to make any changes that will result in a rebalancing and a reduction in these huge trade deficits."

Begun at the behest of the Trump administration, the new negotiations have set nerves on edge among market participants, with several US proposals likely to face stiff opposition from US industry and lawmakers.

The week's talks were extended by 48 hours to allow negotiators to more time to bridge divides in complex areas of trade.

The next round of talks will also last seven days and is due to be held a month from now in Mexico, allowing the three sides the time to assess proposals made so far.

The first four rounds were held at two-week intervals and analysts say the aggressive schedule was never likely to produce a mutually agreeable result before the end of 2017.