WASHINGTON (Reuters) - The United States has softened its contentious demand for a NAFTA “sunset clause,” Mexico’s incoming trade negotiator said on Saturday, potentially eliminating a key obstacle to reaching a deal next week to revamp the trade pact.
A few hours earlier, President Donald Trump tweeted that the United States could reach a “big Trade Agreement” with Mexico imminently.
Jesus Seade, designated chief negotiator of Mexico’s next government, told reporters the new U.S. position would allow a periodic review of the North American Free Trade Agreement, but without an automatic expiration unless renegotiated every five years.
“It’s going to come out. It’s no longer what the United States was putting first in any way,” Seade said of the sunset clause outside the U.S. Trade Representative’s office.
The United States and Mexico have been holding bilateral talks aimed at resolving differences in the NAFTA renegotiation before bringing Canada back to the talks as they push for an agreement-in-principle by the end of August.
Trump tweeted on Saturday morning that the United States’ “relationship with Mexico is getting closer by the hour. Some really good people within both the new and old government, and all working closely together....A big Trade Agreement with Mexico could be happening soon!”
The U.S. sunset clause demand has been one of the biggest roadblocks to NAFTA deal since it was first proposed in October 2017. It was meant by the Trump administration as a mechanism to force a renegotiation of NAFTA every five years if the new terms failed to foster more balanced trade between the three countries. If new terms could not be reached, NAFTA would die.
But Mexico, Canada and business interests in all three countries have adamantly opposed the concept, arguing it would create uncertainty over
