News & Insights

Energy Law Exchange

April 9, 2018

NAFTA Renegotiations Continue

In late February and early March, leaders from Canada, Mexico, and the United States met in Mexico City for the seventh round of negotiations to amend the North American Free Trade Agreement (NAFTA). The negotiators succeeded in concluding three “chapters” of the amended NAFTA, but United States Trade Representative (USTR) Robert Lighthizer said that “we have not made the progress that many had hoped in this round.” Looming over the negotiations was the Trump Administration’s impending tariffs on imports of steel and aluminum. These tariffs were imposed shortly after the seventh round of negotiations ended, but imports of steel and aluminum from Canada and Mexico are exempted “at least at this time” and are the subject of ongoing negotiations.

As previously reported, the NAFTA renegotiation effort began in August 2017 when the three NAFTA countries met in Washington, DC for the first round of negotiations. Canada, Mexico, and the United States have subsequently engaged in six rounds of negotiations. During the sixth round of negotiations, which occurred in January in Montreal, the three countries concluded the chapter on anti-corruption and made progress on other chapters.

During the most recent round, negotiators reconvened in Mexico City and closed three additional chapters: Good Regulatory Practices, Administration and Publication, and Sanitary and Phytosanitary Measures. The parties also concluded sectoral annexes related to chemicals and proprietary food formulas. Ambassador Lighthizer explained that the countries “are making substantial progress” on other chapters (Telecommunications and Technical Barriers to Trade) and had agreed to include a chapter on Energy.

In spite of the progress in Mexico City, however, Ambassador Lighthizer stated that the parties had only closed out six chapters during seven months of negotiations, and the amended NAFTA would require finalizing negotiations for approximately thirty chapters. Given that the presidential election in Mexico, elections for U.S. Congress, and provincial elections in Ontario and Quebec will occur in 2018, Ambassador Lighthizer commented that “our time is running very short.”

The eighth round of NAFTA negotiations is expected to occur in April in Washington.