(Bloomberg) -- President Donald Trump said talks on a revised Nafta are “doing very nicely” as ministers from the U.S., Mexico and Canada meet in Washington to try to push for an agreement by early May.
“Nafta as you know is moving along,” Trump said in a meeting with French President Emmanuel Macron on Tuesday in Washington. “I could make a deal very quickly but I’m not sure that’s in the best interest of the United States. We’ll see what happens, but we’re doing very well.”
Under optimistic conditions, negotiators have a 75 percent chance of reaching a deal soon, Moises Kalach, the trade head for the Mexican business chamber known as CCE, said in an interview with Grupo Formula radio. An agreement on an updated North American Free Trade Agreement could be reached in the next 10 days, he said.
If no deal is reached in the coming days, it could make sense to put negotiations on hold until the end of the year or early 2019, given the presidential election in Mexico in July and the U.S. congressional midterm vote in November, Kalach said.
Negotiating teams have agreed on nine or 10 more topic areas that are ready for ministers’ review and approval, Kalach said. Even so, wide differences remain on some of the toughest issues, such as tightening up the rules of origin for cars and their components, aimed at boosting American manufacturing but that could upend existing supply chains.
Negotiators have also finished work on the telecommunications chapter, two people familiar with the talks said last week, asking not to be identified discussing private negotiations.
Washington Talks
Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Affairs Minister Chrystia Freeland both sounded optimistic notes as they arrived at the U.S. Trade Representative’s Office in Washington on Tuesday for meetings.
Entering the building, Freeland lauded progress on rules of origin for automobiles produced in North America, and said the topic would be the main focus of her talks on Tuesday.
Discussion are in an intensive stage and a successful outcome for all three sides is possible, Freeland told reporters.
“Any day that there’s talks you work toward a goal,” Guajardo told reporters before gong into the USTR. “Nobody can guarantee that you will achieve it. It depends on the commitment and flexibility around the table.”
May Deal
Trump’s negotiators have been pushing for a deal by early May. That would meet the U.S. timeline for having an agreement approved, at the latest, by the lame-duck session that will follow U.S. congressional elections on Nov. 6, said two people familiar with the negotiations.
Guajardo this month said he sees an 80 percent chance of an agreement by the first week of May. Negotiators are also rushing for a deal as Mexico approaches elections on July 1. Mexican left-wing presidential candidate Andres Manuel Lopez Obrador, who has stoked investor concern with talk of canceling an airport and slowing an oil-industry opening, has consistently led in polls.
This week’s talks are set to cover the most ground since the final official negotiating round in Mexico City in early March, according to a preliminary agenda obtained by Bloomberg. Topics include automotive rules, agriculture, and legal and institutional matters such as dispute settlement mechanisms.