Skip to main content

Minister of Foreign Affairs Chrystia Freeland arrives to where the second round of NAFTA talks involving the United States, Mexico and Canada is taking place in Mexico City on Monday.

EDGARD GARRIDO/REUTERS

American negotiators are insisting Canada and Mexico will have to make all the concessions in the overhaul of the North American free-trade agreement while the United States will not give anything up, The Globe and Mail has learned.

A source familiar with the closed-door talks at the Hyatt Regency hotel in Mexico City, where the second round of the NAFTA renegotiation is unfolding, said the Trump administration has taken a hard line at the bargaining table.

The U.S. decision to dig in at such an early stage of discussions means there will be little fast progress, despite a packed agenda and compressed time frame: Negotiators are working on 25 different parts of the agreement, and the United States is pushing to have a deal done before the end of the year.

Story continues below advertisement

Explainer: NAFTA, Trump and Canada: A guide to the trade file and what it could mean for you

Related: Canada demands U.S. end 'right to work' laws as part of NAFTA talks

The United States ratcheted up the tension even further on Saturday by demanding that Canada loosen its system of supply management for dairy, eggs and poultry, said the source, who spoke on condition of anonymity in order to reveal confidential details of the discussions.

This round of discussions, which began Friday, wrap up Tuesday. According to a schedule obtained by The Globe, the final day of talks will include a second day of talks on the rules of origin.

The rules of origin govern how much content in manufactured goods must be produced within the NAFTA zone to be exported between the three countries without paying tariffs. Negotiators will also discuss environment and government procurement, a subject that could include controversial Buy American provisions.

Foreign Minister Chrystia Freeland arrived in Mexico City Monday and had dinner with her counterparts – U.S. Trade Representative Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo – before a series of meetings they will hold Tuesday. Two senior advisers from each country also attended the dinner.

The next round of talks will start later this month in Ottawa; future rounds will continue rotating between the three countries.

Story continues below advertisement

Despite the United States' hard stand, the country did not give its negotiating partners many specifics on what it wants, government and industry sources said.

Washington has not, for instance, said exactly what it wants Canada to do with supply management, whether to loosen the rules or allocate a larger quota for U.S. farmers.

It was a similar story on the rules of origin. The United States signalled in the opening round of talks last month that it would demand more NAFTA-zone content in autos – as well as a quota of specifically U.S.-made content – but has not yet given Canada and Mexico the details on what that would be, the sources said.

One industry source said the United States' prime imperative on rules of origin appears to be helping the domestic steel industry. But the American government is still trying to figure out how exactly to rejig the rules of origin to make that happen.

Canada's apparent strategy has been to make large demands – including that climate change be written into the deal and that the Unites States bans states from adopting so-called "right-to-work" laws accused of gutting unions – knowing they will likely be dialled back as part of the give-and-take. Mexico, meanwhile, is tabling few detailed demands, two sources said, waiting for the United States to reveal its positions before responding.

Armando Ortega, a former Mexican trade negotiator, said the United States' intransigence is unusual at the early stage of talks: Normal negotiations usually begin with all sides putting their best foot forward and trying to reach common objectives. The tough American stand, he said, might be politically motivated posturing. President Donald Trump won last year's election largely by attacking Mexico on trade and border security.

Story continues below advertisement

"If you are Lighthizer, you need to play to the audience. Your boss being who it is, you certainly would like to be very tough, especially if you're in the country that has been your pinata," he said in an interview.

Mr. Ortega, president of the Canadian Chamber of Commerce in Mexico, said it is ironic that the United States – which demanded the negotiations and wants them done by the end of the year – hasn't laid out all the details of its demands.

"They're the demandeur, they should be putting things on the table," he said.

Flavio Volpe, president of Canada's Automotive Parts Manufacturers' Association, said rules of origin will be the key issue for the United States in talks because they will give it something straightforward to take back to its supporters.

He said he believed the United States is still trying to sort out how much North American content the domestic industry could realistically produce to figure out what it can ask for without inadvertently driving production outside of the NAFTA zone.

"That number is the most easily analyzed success or failure point for the U.S. administration. So I think we won't see a solid number until much later in the process," Mr. Volpe told The Globe in the lobby of the Hyatt.

Story continues below advertisement

Mr. Volpe said the United States' hard line at the opening of the talks was likely an "on the moment tactic," and doesn't mean the negotiations are doomed.

"The waters are going to boil some times more than others," he said. "But it's just language."

U.S. President Trump repeated comments made last week about his view that NAFTA is unfair toward America and that the deal should be terminated.
Report an error Editorial code of conduct
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter