US Trade Chief Says He Is Not Focused on Ending NAFTA

Time running out for Nafta talks, set to be extended: Sources

The meeting will be terminated in fourth part of negotiations, U.S. trade representative Robert Lighthizer, Canadian Foreign Minister Christia Freeland and Mexican economy Minister Ildefonso Guajardo Villarreal.

According to Politico, sources familiar with the USA position called the proposal a "five-page attack" on Canada's supply management system by demanding the elimination of the new price class on milk protein concentrates as well as transparency requirements for Canada to report pricing decisions.

The outcome left the success of the talks in doubt, with President Donald Trump having repeatedly threatened to scrap the landmark regional trade pact.

"We made it clear that these are issues that from the Canadian side are non-starters", the Canadian source, speaking on the condition of anonymity, told CNNMoney.

Canadian and Mexican officials rejected some US proposals introduced during the latest round, according to one government source from each country. Since it was implemented, Mexico's unemployment has risen and the deal put about two million small-scale Mexican farmers out of business, forcing many of them to migrate to the United States looking for work.

This aggressive positioning by the US came after the third round of talks saw little negotiations on the American side.

The first key disagreement is over "rules of origin". It doesn't matter if the auto parts are made in Mexico, Canada or the United States, as long as they were produced in North America.

"Even if the national impact is limited, a NAFTA collapse would hit certain U.S. states and industries quite hard", Ashworth said in a note. The Trump administration has proposed that at least 50% of the content in cars must be made in the USA for vehicles from Mexico and Canada to enter the US duty-free. The U.S. also proposed that half of the parts that come from North America must originate from the United States. It's possible that his administration is trying to sabotage the agreement to justify a withdrawal, said Paul Ashworth, the chief U.S. economist at Capital Economics.

Under the sunset clause, the agreement would expire every five years unless all three nations agree to sign on for five more.

Despite the tension at the talks, Mexican and Canadian officials have stressed that their governments will not walk away from the table. Canada and Mexico won't stand for it.

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