PENTAGON, United States — The NAFTA talks have now entered their most difficult phase with the United States beginning to drop its bombshell proposals on the negotiating table at a just-begun fourth round outside Washington.
U.S. officials had foreshadowed that this week-long round would be where the most contentious discussions opened and that is coming to fruition, with the American side levelling one demand deemed a non-starter — and preparing to deliver another one.
The just-delivered demand would create a so-called termination clause. It would end NAFTA after five years, unless its member countries explicitly opted to renew it. That proposal was delivered late Wednesday night.
That comes after the U.S. proposed far stricter Buy American rules at the last negotiating round, and in the leadup to one of the most important proposals of the entire negotiation: on rules for auto parts, which could come as early as Friday.
“More contentious issues will be coming up very shortly,” U.S. Commerce Secretary Wilbur Ross said during a panel discussion this week at the Dentons law firm.
“So far the talks have mainly done basic background things. Kind of what I would call boilerplate things. Relatively easy issues.”
The other NAFTA countries say they’re legitimately baffled by where the U.S. is headed.
Sources say others are trying to figure out what this hardline approach signals from the U.S. — opening positions that will be flexible with some bargaining hard demands or a desire to poison the talks, let them collapse, and simply do away with NAFTA.
Some allies of President Donald Trump predict the deal will be successfully renegotiated.
Newt Gingrich said this week he sees little appetite within the U.S. cabinet for the type of turmoil cancelling NAFTA might cause. He said Trump’s team is filled with free-traders, who simply believe the U.S. needs tougher deals.
Ross himself said he doesn’t anticipate a NAFTA collapse, though he added a caveat: “We don’t hope it will (end), we don’t desire that it will, we don’t believe that it will, but it is at least a conceptual possibility.”
Canada and Mexico are vehemently opposed to the five-year termination idea, seeing it as a destabilizing investment-killer and an unacceptable red line. Canada’s ambassador to the U.S. has joked that if the same idea were used in marriage licenses, the divorce rate would skyrocket.
But Ross confirmed it as the U.S. position, and shrugged off the talk of red lines.
“Yes, that’s our proposal,” Ross said, adding dismissively: “Red lines, blue lines, green lines, purple lines — those are just colours in a rainbow… It’s a big, complicated negotiation and the key is having an overall package that works (at the end).”
The next big scare could come Friday the 13th.
That’s when the group handling rules for auto parts meets for the first time in this round, and it’s expected the U.S. is preparing to level demands viewed as non-starters by Canada, Mexico, and the auto industry.