The sixth and penultimate round of negotiations to update the North American Free Trade Agreement (NAFTA) opened in Montreal on Tuesday with time running out for Canada and Mexico to settle big differences with the United States.
With financial markets skittish about the possible collapse of a $1.2 trillion global trading bloc, Canada and Mexico say they are prepared to be flexible on U.S. proposals they had initially rejected as unworkable.
One thorny issue is Washington’s demand for a sunset clause that would kill NAFTA if it is not renegotiated after five years, an idea critics say would slash business investment.
Canada’s chief negotiator Steve Verheul told Reuters he had “a constructive conversation” with his U.S. counterpart on Wednesday after presenting Canada’s suggested amendments to the sunset clause. He did not give details.
A source close to the talks said Canada’s approach mirrored Mexico’s proposal last year for a semi-regular review of the treaty that would not lead to its termination.