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NAFTA ministers to reconvene Tuesday on signs of progress

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Washington | Reuters — Canada and Mexico on Friday said good progress had been made in talks with the U.S. to modernize the North American Free Trade Agreement (NAFTA) and that ministers would meet again on Tuesday as they push to wrap up a deal.

Canada’s Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo struck a positive note after a second day of meetings with U.S. Trade Representative Robert Lighthizer in Washington to revamp the 24-year-old accord.

“We are certainly in a more intense period of the negotiations and we are making good progress,” Freeland told reporters, saying negotiating teams would stay in Washington over the weekend as the eight-month-old talks continue.

Guajardo, who has often sought to temper optimism for a quick deal, said the ministers would meet again on Tuesday.

“There was a lot of progress made today,” he said.

The three ministers are pressing for a quick deal to avoid clashing with a July 1 presidential election in Mexico, but there have been major differences on several U.S. demands.

Canada and Mexico have battled for months with a U.S. demand for tougher automotive rules of origin. They dictate how much North American content vehicles must contain under NAFTA, which underpins some US$1.2 trillion in annual trilateral trade.

“We continue to work very hard on rules of origin, really the heart of this agreement,” Freeland said.

The Trump administration had initially demanded that North American-built vehicles contain 85 per cent content made in NAFTA countries by value, up from 62.5 per cent at present.

However, auto industry executives said last week that Washington had significantly softened this in an effort to move faster toward a deal in the next few weeks.

President Donald Trump, who has repeatedly threatened to walk away from NAFTA unless major changes are made, says the pact has created jobs in Mexico at the expense of U.S. workers.

Lighthizer instilled fresh momentum into the talks in early March by floating the prospect of a quick deal “in principle.” Still, Mexican and Canadian officials say only an agreement covering the essential details will be viable.

— Jason Lange is Reuters’ U.S. economics correspondent in Washington; writing by Dave Graham.

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