DAVID GREENE, HOST:
A new round of talks is underway in Mexico City to rewrite the North American Free Trade Agreement. This is happening at a tense time for relations on the continent. Canadian officials are threatening to retaliate if the Trump administration goes ahead with tariffs on steel imports. And Mexico's president, Enrique Pena Nieto, recently called off a White House visit over the president's proposed border wall. So I think you could say negotiators from these three countries have to overcome some major differences if they're going to get anything accomplished. Here's NPR's Jim Zarroli.
JIM ZARROLI, BYLINE: President Trump came to office vowing to renegotiate NAFTA, which he called one of the worst trade agreements ever written. Changing the agreement was always going to be politically tough. But with so much at stake economically, Mexico and Canada have had little choice but to meet the U.S. at the bargaining table. Jeffrey Schott is a senior fellow at the Peterson Institute for International Economics.
JEFFREY SCHOTT: The good news about the Mexican round is that it's taking place and that all three countries are still seriously engaged in negotiations and trying to find ways to bridge differences in key positions.
ZARROLI: Schott says in previous talks, the three countries have managed to agree on some smaller issues. But, he says...
SCHOTT: There are many issues where progress has been much slower and some of the issues where the negotiators are very far apart because the U.S. proposals have been so unconventional.
ZARROLI: For example, the Trump administration wants to give the three countries an escape clause every five years if they don't like the way trade is going. Critics say such a move would undercut the whole point of NAFTA, which is to provide the economic certainty that businesses need to invest. The administration also wants to ensure that more of the content of autos sold in the U.S. is domestically produced. Lori Wallach of Global Citizens Trade Watch (ph), a longtime NAFTA critic, says some of the administration's efforts would help workers by tightening labor standards.
LORI WALLACH: That might actually deliver some of President Trump's promises about jobs and wages. But it sure is not popular with the corporate lobby nor with Mexico and Canada.
ZARROLI: But, Wallach says, the three sides remain at odds over these issues, and there's little time left to negotiate this year.
WALLACH: All of these issues are coming to a head because the Mexican presidential election coming up on July 1 puts a pretty firm stop to when NAFTA renegotiations can actually occur.
ZARROLI: After that come provincial elections in Canada and the U.S. midterms, which will make coming to an agreement that much harder. Wallach says the best U.S. officials can hope for may be to tackle some of the bigger points of contention this year and then finish the job in 2019. Jim Zarroli, NPR News.
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