WRAPUP 2-USTR Lighthizer eyes NAFTA ‘breakthrough,’ Mexico urges flexibility

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The U.S. and Mexico are "very, very close" to reaching a deal to update the North American Free Trade Agreement (NAFTA).

Trump's remarks to Lighthizer were in keeping with his long-expressed view that the U.S.is willing to walk away from NAFTA if it can not strike a trade deal more favorable to the U.S.

He said there now were no trade talks with Canada.

Regardless of whether one agrees with Trump's negotiating tactics, Orava said, if the administration can land a good agreement on a new NAFTA, "it will validate their approach to US trade policy is effective and generating results and worthwhile". "We all agree it's time to bring this trade deal into the 21st century, but even if some elements of agreement are negotiated bilaterally, my expectation is ultimately a trilateral agreement that meets the high standards of Trade Promotion Authority and gains the support of Congress".

Reaching an agreement with Mexico would mark a breakthrough for the administration after a year of roller-coaster talks and tension with its longtime North American trading partners.

NAFTA talks ground to a halt in late May in the run-up to the presidential election in Mexico on July 1.

U.S. Trade Representative Robert Lighthizer gestures as he testifies before Senate Appropriations Commerce, Justice, Science, and Related Agencies Subcommittee hearing on the proposed budget estimates and justification for FY2019 for the Office of the United States Trade Representative, at the Dirksen Senate Office Building in Washington, U.S., July 26, 2018.

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In regard to their sideline position, Canada states that there have been several unilateral discussions over the past few months in the negotiations, and that they are simply waiting for the US and Mexico to resolve their issues before they rejoin the talks. Mexico's new president, Andrés Manuel Lopez Obrador, was elected in July and takes the oath of office December 1.

Tensions between Canada and the USA also rose June 1 when the US ended an exemption for Canada, Mexico and the European Union from 25 percent steel and 10 percent aluminum tariffs imposed for national security reasons under Section 232 of the Trade Expansion Act of 1962.

In exchange, the United States trade representative, Robert Lighthizer, appears to be showing flexibility on an earlier demand for an automatic five-year termination of NAFTA and a proposal to make it easier for the U.S.to press anti-dumping claims against seasonal produce like tomatoes from Mexico. "Whether that happens or not depends on the will of the White House". The Trump administration had excluded the countries from global tariffs on the imports after concluding that the use of foreign-made steel and aluminum made the USA dependent on imports and posed an economic threat to domestic steel and aluminum manufacturers.

Trade negotiators have sounded optimistic in recent weeks.

U.S. President Donald Trump is seen here speaking at a recent rally.

"NAFTA has been a disaster for our country", he said.

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