U.S., Mexico Bridge Differences on Nafta Farm Goods

(Bloomberg) -- The U.S. and Mexico are resolving their differences on agricultural products covered under Nafta after the Trump administration withdrew some of its sweeping demands, bringing the nations closer to an overall deal, according to five people familiar with the discussions.

U.S., Mexico Bridge Differences on Nafta Farm Goods

American negotiators dropped their demand in the last week to erect barriers against seasonal imports of a wide variety of Mexican farm goods, according to the people, who asked not to be named discussing private negotiations. Two of them said the countries may agree to narrower restrictions on some Mexican produce, such as tomatoes.

Mexico’s peso extended gains in afternoon trading, and is up 0.5 percent on the day to 18.88 per dollar.

See why some U.S. farm groups oppose restrictions on imports from Mexico

The Trump administration, under pressure from growers in Florida and Georgia, had sought since September to limit imports of Mexican agricultural products like strawberries and blueberries. The Mexican negotiating team had considered the original U.S. proposal to be unacceptable and a violation of World Trade Organization rules.

The press offices of U.S. Trade Representative Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo didn’t return emails seeking comment on the development.

Car Manufacturing

The countries are also making progress on the thorny issue of car manufacturing, as the Trump administration pushes for a deal that would boost factory jobs in America. The U.S. has proposed tightening regional content requirements for car production and having a certain percentage of a car manufactured by higher-paid workers.

U.S., Mexico Bridge Differences on Nafta Farm Goods

Negotiators are now focused on the amount of time companies would have to transition to the new rules, according to two other people, who asked not to be named discussing private discussions.

The progress comes as the two countries race to finish working out changes to the 24-year-old North American Free Trade Agreement, which has been under negotiation for a year. The U.S. and Mexico are pushing for an agreement this month that would give the countries time to sign the pact before Mexico’s President-elect Andres Manuel Lopez Obrador takes office in December.

‘Very Close’

Canada, the third partner in Nafta, has been absent from face-to-face talks in recent weeks. The Trump administration has said an agreement with Mexico will put pressure on Canada to soften some of its demands.

U.S., Mexico Bridge Differences on Nafta Farm Goods

“We’re very very close to a deal with Mexico,” Kevin Hassett, chairman of the White House Council of Economic Advisers, said Friday on Fox Business Network. “There are a few sticking points, but there’s been so much progress made.”

Guajardo also sounded an optimistic note Friday, where he wrapped up his fourth straight week of discussions with Lighthizer.

“We are advancing,” the Mexican economy minister told reporters in Washington. “Most of the agenda -- Mexico-U.S. -- has been advancing well, and we still have to be back next week.”

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