Since the last NAFTA Insights, there have been comments via social media about the potential for US withdrawal from the Agreement and scrutiny of dispute resolution mechanisms, labor standards and local content rules. With Eurasia Group providing the latest developments from Round 2 of the NAFTA renegotiations, this edition considers whether the US President can withdraw from NAFTA – and the ‘all bets are off’ scenario that you should build into your business planning.
On 5 September, Mexico, the US and Canada concluded the second round of NAFTA negotiations in Mexico City. Overall, the negotiations unfolded as predicted but without significant progress on key issues.
On the positive front, the representatives from the three countries were able to meet despite US President Donald Trump’s recent threats to abandon the deal and consternation that an agreement would not be achieved. This shows the commitment of the negotiating teams to move forward and focus more on the technical discussions.
However, this second round did not result in any substantive progress. The three countries released a joint statement announcing that they had compiled the agreements of this second round in one single text that included new ideas and the consolidation of existing proposals (negotiations in sectors such as energy, telecommunications and financial services will be run swiftly), but US negotiators, while pushing to amend the treaty, have not released specifics on the key changes they want to implement.
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