August 9, 2018 / 2:30 PM / 3 months ago

Mexico says working hard with U.S. on new NAFTA auto rules

WASHINGTON (Reuters) - Mexico’s economy minister on Thursday said his team was working hard to strike a deal with the United States on new rules for the auto industry, which could pave the way for Canada to rejoin talks to revamp the North American Free Trade Agreement.

FILE PHOTO: Mexico's Economy Minister Ildefonso Guajardo speaks to the media during a news conference at Los Pinos presidential residence in Mexico City, Mexico May 1, 2018. REUTERS/Henry Romero/File Photo

The U.S.-Mexico NAFTA talks resumed three weeks ago, without Canada at the table, after negotiations involving all three members of one of the world’s largest trade blocs stalled in June.

After a second day of meetings with U.S. Trade Representative Robert Lighthizer in Washington, Mexican Economy Minister Ildefonso Guajardo said talks were “advancing” but that it was not clear how long it would take to settle U.S.-Mexico issues before Canada would come back to talks.

“We keep working, we are advancing and progressing with various issues, this morning we covered a good number of them,” Guajardo said.

Mexico and Washington have been discussing rules for the automotive sector, which has been a major point of contention between the two countries.

The United States has sought tougher rules on what percentage of a vehicle’s components need to be built in the NAFTA region to avoid tariffs, as well as demanding that a certain number of cars and trucks be made in factories paying at least $16 an hour.

Asked about the discussion on autos on his way out of Lighthizer’s office, Guajardo said “we are doing our best to do it as fast as possible,” adding that he would remain in Washington on Friday.

Before entering the meeting with Lighthizer, Guajardo was asked by reporters whether Canada would take part next week in the talks, and he said “possibly.”

“But we have to make sure that the U.S.-Mexico bilaterals (are) done,” he said.

Guajardo was accompanied on Thursday by Mexico’s Foreign Minister Luis Videgaray and Mexican President-elect Andres Manuel Lopez Obrador’s pick for chief NAFTA negotiator, Jesus Seade.

Asked if talks would conclude this week, Seade said: “We are advancing well, but there are a lot of things to review ... It is not clear if we will finish this week or the next.”

A U.S.-proposed so-called sunset clause that would kill a NAFTA deal unless it is renegotiated every five years has been another major stumbling block in the talks.

Guajardo said negotiators were leaving some issues for last and that the sunset clause, which was “highly complex,” had not yet been touched.

Additional reporting by Daphne Psaledakis in Washington; additional reporting by Adriana Barrera in Mexico City; Writing by Michael O'Boyle; Editing by Tom Brown

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