US softens demand for a NAFTA ‘sunset clause’, says Mexican official

27 August, 2018

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The Trump administration has softened its position on a “sunset clause” that would force a renegotiation of the North America Free Trade Agreement (NAFTA) every five years, Reuters reported on Saturday citing as source Mexico’s incoming trade negotiator Jesus Seade.

“Seade, who will serve as chief negotiator for Mexico’s next government, said he and U.S. Trade Representative Robert Lighthizer were now discussing a periodic review process that spare the North American Free Trade Agreement from automatic expiration unless new terms were agreed,” Reuters said.

The measure was rejected by Mexico and Canada as well as business groups which said it will stifle long-term investment decisions.

Seade said he and Lighthizer last week began discussing a new approach to review the trade pact, that would have longer periods between reviews, providing more certainty for business investments. However, a spokeswoman for the U.S. Trade Representative’s office denied that Lighthizer had softened his position, without further elaboration.

The Mexican official also spoke on the issue of automotive sector rules, which he said is “basically resolved”, although some aspects, including deadlines, are still being discussed. Seade also said that a “correct approach” in the energy chapter of NAFTA has already been agreed upon substantially.

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