Nafta Trio Meets as Telecom Said to Be Latest Issue Resolved

(Bloomberg) -- Nafta negotiators are said to have wrapped up another chapter of the deal as the three ministers leading talks meet again in Washington amid a push for a deal in principle within weeks.

U.S. Trade Representative Robert Lighthizer is meeting Canada’s Chrystia Freeland and Mexico’s Ildefonso Guajardo in sessions Thursday and Friday in Washington. The talks come amid what Freeland called an “intensive phase” after the ministers’ last session on April 6.

Nafta Trio Meets as Telecom Said to Be Latest Issue Resolved

They meet as negotiators are said to have finished work on the telecommunications chapter, according to two people familiar with the discussions, who asked to remain anonymous because the discussions are private. The telecom chapter is the seventh completed out of about 30 under consideration for a final deal.

Freeland, speaking to reporters Thursday in Washington, said Nafta talks are in period of “intensified engagement” and that so-called rules of origin for the automotive sector will be among the things discussed in her meetings.

“We are very committed to getting a deal, to getting a modernized Nafta,” she said. “We also think we need to take the time it takes to get a good deal, to get details right on complicated issues like rules of origin. So we’ll see how today’s talks go.”

Nonetheless, a few key disputes -- such as autos, agriculture and investor-state dispute panels -- will determine whether a deal is possible, said Flavio Volpe, head of an industry group representing Canadian auto parts makers. “On balance, we may be close enough on all of them to get a deal done,” he said in an interview.

Freeland said the auto issue is at “the heart of this agreement” and had gained momentum after a U.S. proposal about a month ago. “It is important to use this as a process that certainly enhances North American competitiveness, that is good for our steel industries, that ultimately though it does have to be something that works. We’re going to be focused on cutting red tape.”

The countries haven’t publicly confirmed an agreement on the telecom chapter. A request for comment from USTR wasn’t immediately returned. Alex Lawrence, a spokesman for Freeland, declined to comment. The U.S. had sought assurances to promote competition in Mexico’s telecom industry, where companies including AT&T Inc. have been investing and Carlos Slim’s carrier America Movil SAB is the top mobile phone player.

Talks have shifted gears to what Guajardo called a permanent round of negotiations as the Trump administration eyes a stopgap deal. U.S. Vice President Mike Pence and Guajardo have both said a deal could be reached in the coming weeks, though there are signs that there could be a deal that leaves the fine-print to further talks between bureaucrats.

Big gaps remain and the Thursday meeting is unlikely to be a final step. The ministers’ meeting will be closely watched for signs of breakthroughs on some of the key divides, such as the auto sector. But no statement or announcement is expected at this time, said a U.S. administration official speaking on condition of anonymity.

The ministers are scheduled to hold a series of bilateral and trilateral talks Thursday and Friday. Mexico Foreign Minister Luis Videgaray is also said to be planning to come to Washington to try to break a Nafta impasse.

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