Lighthizer Slams Canada and Mexico for Refusing to Accept NAFTA Reforms

"As retailers, we strongly urge all parties to preserve the parts of NAFTA that work for American businesses and to avoid proposals that would damage the USA economy and hurt American families". "If we end up not having an agreement, my guess is all three countries would do just fine".

Freeland said some proposals put forward would "turn back the clock" and potentially "run counter" to World Trade Organization rules.

"Frankly, I am surprised and disappointed by the resistance to change from our negotiating partners on both fronts", he said during a press conference on Tuesday.

The sources say Canadian negotiators are calling the demand "a non-starter". It's possible that his administration is trying to sabotage the agreement to justify a withdrawal, said Paul Ashworth, the chief United States economist at Capital Economics. Lighthizer insisted that 50 percent of all vehicle parts originate from the United States and 85 percent within North America. Critics say this has allowed manufacturers to use NAFTA to get around US import taxes while doing a substantial amount of manufacturing in China and other countries outside North America.

This year's NAFTA re-negotiations stem from U.S. President Donald Trump's insistence that the agreement be remodeled lest the U.S. leave the deal entirely.

Mexico will host the fifth round of talks in November, and additional talks will be held next year. "Because of its complex supply chains that cross both borders, the auto industry would suffer the most, with autos accounting for almost 40% of exports to Canada and 22% of exports to Mexico". The Trump administration has proposed that at least 50% of the content in cars must be made in the US for vehicles from Mexico and Canada to enter the USA duty-free.

Mexican economist and financial analyst Luis Rubio said the greatest danger to Mexico if NAFTA is scrapped is loss of confidence in the nation as a place for investment.

He argued that Mexican and Canadian trade negotiators are refusing to accept provisions they have agreed to in the past, including portions of the Trans-Pacific Partnership (TPP) agreement.