By Emily Green and David Lawder
MEXICO CITY, July 23 (Reuters) – U.S. and Mexican officials will convene for a fourth round of negotiations to renew the North American trade pact in early September, Mexico’s economy ministry said on Thursday, following talks this week aimed at narrowing differences on key issues.
U.S. Trade Representative Jamieson Greer met with Mexican President Claudia Sheinbaum and Economy Minister Marcelo Ebrard this week during a third round of talks over the U.S.-Mexico-Canada Agreement (USMCA).
“The conversations were constructive and produced advances on topics like steel, aluminum” and substitution of imports from Asia, Ebrard said in a statement on Thursday.
The talks come as the countries renegotiate the six-year-old agreement, which underpins nearly $1.6 trillion in once duty-free regional trade. Negotiations threaten to bleed into next year, prolonging business and investment uncertainty that Mexico and Canada have been seeking to ease.
But the two sides remain far apart on key issues, according to two sources familiar with the negotiations who spoke on condition of anonymity because of the sensitivity of the talks.
One of the biggest sticking points is Washington’s demand that vehicles contain 50% U.S. content to qualify for preferential market access.
The proposal has been a non-starter for the Mexican government, one of the sources said. Mexico is unwilling to accept “even 1%” of American content, one of the sources said, adding that such a provision “opens the door for a potential increase in the future” and sets a problematic precedent.
Under the current trade pact, vehicles must contain 75% North American content to qualify for duty-free treatment, with 40% produced by workers earning at least $16 per hour – a threshold met in the U.S. and Canada. The agreement, however, does not require that a fixed share of content come from any one country.
Mexico, meanwhile, is asking Washington to adjust “Section 232” national security tariffs of 25% on autos and 50% on steel and aluminum from Mexico and Canada before making concessions on other issues. But U.S. President Donald Trump has shown no sign of easing the tariffs.
In Senate testimony on Wednesday, Greer said he hopes to strike interim trade agreements with Mexico and Canada this year while tackling thornier changes to the U.S.-Mexico-Canada Agreement in 2027.
“At this point, every (negotiation) round adds value,” said Kevin Brady, a former Texas U.S. representative who once chaired the powerful U.S. House of Representatives Ways and Means Committee and supports the North American trade pact. “The negotiations are not in a bad place.”
(Reporting by Emily Green and David Lawder; Editing by Christopher Cushing)
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