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Toyota executive: U.S. seeks 'impossible' changes to NAFTA for Mexico, Canada


"Frankly, I am surprised and disappointed by the resistance to change from our negotiating partners", US Trade Representative Robert Lighthizer told reporters at a closing press briefing, as he stood at a lectern between Canadian Foreign Minister Chrystia Freeland and Mexican Economy Secretary Ildefonso Guajardo.

NAFTA was harshly criticized by candidate Donald Trump, and press reports say Washington has since proposed renegotiating the deal every five years, requiring more US -made content in automobiles, and scaling back a mechanism to resolve disputes.

The Retail Industry Leaders Association, which encompasses more than 200 retailers, manufacturers and suppliers, added that Nafta's downfall would incur "massive" disruptions in agriculture and manufacturing as well as higher costs for US consumers.

The fifth round, to be held in Mexico City, has been postponed until November 17-21. Negotiators extended discussions into next year amid an impasse over US proposals that Mexico and Canada see as hardline.

Canada and Mexico are balking at America's demand that a revamped deal do something to reduce America's trade deficits. "As hard as this has been, we have seen no indication that our partners are willing to make any changes that will result in a rebalancing and a reduction in these huge trade deficits".

US industry has reacted harshly to the trade talks.

"Who would want to make an investment if they don't know what is going to happen in five years?" says former U.S. Ambassador to Mexico James Jones, now chairman of Monarch Global Strategies. "Canada believes that too", she said.


"Everybody has to give up a little bit of candy", Lighthizer said, adding that if "a little bit of the sugar" is taken away, companies can make money in other ways.

The fourth round of NAFTA renegotiations came to an end on Tuesday amid tensions and concern over the future of the agreement, as the proposals made by the United States were rejected by Mexico and Canada.

The Brookings Institution's Dany Bahar said trade deficits are not the cause of job losses, and called the US focus misplaced.

In a recent note to clients, Edward Glossop, Latin America economist at Capital Economics, said the currency could tumble to at least 22 per dollar, but probably further, to about 22.50 or 23 per dollar if the trade deal were to collapse.

"Economists generally argue that it is not feasible to use trade agreement provisions as a tool to decrease the deficit because trade imbalances are determined by underlying macroeconomic fundamentals", says the 37-page report.

The United States now has a trade deficit with Mexico of greater than $60 billion, but according to Freeland the United States now enjoys a small surplus with Canada of about $8 billion out of more than $630 billion in annual trade. "Furthermore, including Section 230 in NAFTA in its current form would export a destructive legal battle that will harm sex trafficking victims advertised in Mexico and Canada".

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