Mexico, U.S. agree to speed NAFTA talks toward August deal

WASHINGTON (Reuters) - Mexico and the United States agreed on Thursday to step up talks on updating the NAFTA trade deal in hopes of reaching an agreement on major issues by August, Mexican Economy Secretary Ildefonso Guajardo said.

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Guajardo said he had “constructive” and “very positive” talks with U.S. Trade Representative Robert Lighthizer and President Donald Trump’s son-in-law and senior adviser, Jared Kushner.

North American Free Trade Agreement talks among the United States, Mexico and Canada had stalled since June when the United States slapped tariffs on Mexican and Canadian steel and aluminum and both countries responded with tit-for-tat measures on products like U.S. pork, ketchup and Kentucky bourbon.

Guajardo told reporters after the talks in Washington that he and Lighthizer agreed they would need to get to work in order to hammer out a deal by August.

“We agree that in order to align the times and to eventually reach an agreement in principle, we should give ourselves the opportunity to move forward and try to bring this to fruition,” Guajardo said.

Lighthizer told U.S. lawmakers earlier on Thursday that he expected to reach a deal with Mexico “some time in August” and that an agreement with Canada on NAFTA could follow.

Trump has suggested he could seek a bilateral deal with Mexico, but Guajardo said the U.S.-Mexico talks would lead to discussions with Canada and “a trilateral dialogue when we get closer to the conclusion.”

Canadian Foreign Minister Chrystia Freeland visited Mexico on Wednesday and she and Guajardo insisted that NAFTA remain a trilateral pact.

Both reiterated their opposition to U.S. calls for a “sunset clause” that would put the deal forming one of the world’s largest trading blocs up for renewal every five years.

U.S. demands for sweeping changes in the auto sector have also been a stumbling block.

“The idea is to face complex issues,” Guajardo told reporters on Thursday before meeting Lighthizer.

The talks to revamp NAFTA began in August 2017 at the request of Trump, who threatened to leave the pact if he did not get more benefits for U.S. workers.

The run-up to Mexico’s July presidential election, where leftist Andres Manuel Lopez Obrador won in a landslide, had also complicated holding talks.

Guajardo was joined on Thursday by Jesus Seade, whom Lopez Obrador has tipped as his lead trade negotiator.

Trump told Lopez Obrador in a letter that a quick conclusion to NAFTA talks would bring more jobs for both countries, but warned of a very different route otherwise.

Reporting by David Lawder; Additional reporting by Adriana Barrera in Mexico City; Writing by Michael O’Boyle; Editing by Peter Cooney