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First round of NAFTA talks conclude between US, Canada and Mexico

22 August 2017

US, Canadian and Mexican negotiators on Sunday wrapped the first round of talks aimed at revamping the 23-year-old North American Free Trade Agreement, part of a US effort to cut its trade deficit.

Mexico, the USA and Canada agreed to continue negotiations at an accelerated pace, which will require a large effort and commitment, according to the final statement of the first round of talks.

The timeline for the talks is accelerated given elections in Mexico in July 2018, as well as the United States legislative calendar, with seven to nine rounds expected to finish the revisions by the end of 2017. Negotiators are expected to head to Mexico City for the second round from September 1-5, and to Canada for the third round from September 23-27.

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Robert Lighthizer, President Donald Trump's top trade adviser, this week said Washington wanted tougher rules of origin for autos, which determine how much of a vehicle must be built in the three NAFTA nations. While U.S. trade with its Nafta partners has more than tripled since the agreement took effect in 1994, Trump blames the pact for gutting U.S. manufacturing and sending factory jobs to Mexico.

"Despite good intentions, this Nafta renegotiation may be more akin to a lengthy process of couples therapy than a quick exercise in speed dating", said Chad Bown, a senior fellow at the Washington-based Peterson Institute of International Economics.

U.S. officials said they could not confirm the source's account.

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"The scope and volume of proposals during the first round of the negotiation reflects a commitment from all three countries to an ambitious outcome and reaffirms the importance of updating the rules governing the world's largest free trade area", according to the statement.

One of the issues that has popped up in these early negotiations has to do with so-called "rules of origin", which stipulate that a certain percentage of a product - its parts and materials - has to come from one of the NAFTA countries to be exempt from border taxes.

But during the opening four-hour round of talks on rules of origin last Friday, the USA delegation did not give details of how much it wanted the requirements to be lifted by.

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First round of NAFTA talks conclude between US, Canada and Mexico