NAFTA renegotiation talks will go into next year

Yuri Gripas | Reuters

(L-R) Canadian Foreign Affairs Minister Chrystia Freeland, U.S. Trade Rep Robert Lighthizer and Mexican Secretary of Economy Ildefonso Guajardo Villarreal arrive at a joint news conference after a NAFTA trilateral ministerial press event in Washington, October 17, 2017.

In the meeting before officials spoke Tuesday, Mexico and Canada were expected to firmly reject protectionist proposals put forward during the current round of talks, CNBC reported. The countries plan to push through with negotiations despite the rejections.

In the last week, U.S. negotiators formally proposed that a new deal with Canada and Mexico favor American manufacturing and end after five years if all countries do not renew it. The U.S. Chamber of Commerce called those measures “poison pills,” while participants in the talks called them “nonstarters.”

Trump has repeatedly slammed the 23-year-old trade agreement. In an Oval Office meeting with Canadian Prime Minister Justin Trudeau last week, Trump again threatened to scrap the free trade agreement if the countries cannot strike a deal to rework it.

“If we can’t make a deal, it’ll be terminated and that will be fine,” Trump said. “They’re going to do well; we’re going to do well, but maybe that won’t be necessary. But it has to be fair to both countries.”

Lighthizer said the end of the year was not meant to be a “hard target” to reach a deal. He does not want the extension of talks to interfere with the Mexican presidential election in July of next year.

While he wants to reach an agreement, Lighthizer added that the countries will “do just fine” if NAFTA gets terminated.

Most members of Congress, as well as American companies, do not want to see the deal get scrapped.

Canada was the United States’ second-largest goods trading partner last year, while Mexico was the third, according to the office of the USTR. Mexico sent more goods to the U.S. in 2016 than every country but China.

Trump has focused his ire on trade deficits, which he says hurt the U.S. economy and American workers. The U.S. had goods trade deficits of about $63 billion and $12 billion last year with Mexico and Canada, respectively, according to the USTR.

— CNBC’s Kayla Tausche contributed to this report.