Discussions were held in Ottawa, Canada this week

Discussions were held in Ottawa, Canada this week

The third round of renegotiations for the North American Free Trade Agreement (NAFTA) concluded this week with "significant progress" made by those involved but concerns remain that the three partners won't be able to conclude negotiations by the end of the year.

Following the meetings, which took place in Ottawa, Canada from 23-27 September, Canadian Foreign Affairs Minister Chrystia Freeland, Mexican Secretary of the Economy Ildefonso Guajardo, and United States Trade Representative Robert Lighthizer said significant progress was made in several areas through the consolidation of text proposals, narrowing gaps and agreeing to elements of the negotiating text. 

In particular, discussions regarding small and medium-sized enterprises (SMEs) were "substantively completed", effectively concluding negotiations on that chapter pending specific outcomes in related discussions.

The inclusion of a chapter on SMEs in a modernised NAFTA recognises the contribution that SMEs make to our economies, says the Office of the United States Trade Representative, which adds the chapter will "serve to support the growth and development of SMEs by enhancing their ability to participate in and benefit from the opportunities created by this agreement, including through cooperative activities, information sharing, and the establishment of a NAFTA Trilateral SME Dialogue, involving the private sector, non-government organisations, and other stakeholders". 

In addition to a specific chapter on SMEs, negotiators are also working on modernising other aspects of the agreement that would benefit SMEs, including customs and trade facilitation, digital trade, and good regulatory practices.

"Meaningful advancements" were also made in the areas of telecommunications, competition policy, digital trade, good regulatory practices, and customs and trade facilitation. Parties also exchanged initial offers in the area of market access for government procurement. 

Discussions also touched upon energy trade, gender and indigenous peoples, and the group advanced "substantively" in the competition chapter, with negotiations on this chapter expected to conclude prior to the next round, which is scheduled for 11-15 October in Washington DC. 

But while Lighthizer and his counterparts say important progress was achieved in many disciplines, customs and international trade law firm Sandler, Travis & Rosenberg, notes concern remains that the three partners will not be able to conclude negotiations by the end of the year.

"Following the third round, senior Mexican and Canadian officials pointed out that the US had not yet submitted detailed proposals on some issues that are expected to be particularly contentious, including lowering the US trade deficit, revamping the dispute settlement process, and tightening rules of origin, particularly with respect to automobiles and auto parts."

However, the firm's Trade Report, published today (29 September), said that according to a Reuters article, Lighthizer defended the US approach, stating that "any suggestion that we're not operating beyond a normal pace is just flat wrong".

Earlier this week, ten business groups – representing companies from across the textile and apparel supply chain in Canada, the US, and Mexico – urged negotiators to preserve Tariff Preference Levels (TPLs) in the NAFTA negotiations.

Industry groups call for TPLs to continue in NAFTA

Meanwhile, just two days later, US Commerce Secretary Wilbur Ross stressed the need to "fix the rules of origin" in NAFTA after a new report identified declining US-produced content in imports from Mexico and Canada.

Fall in US content shows need to fix NAFTA rules of origin