NAFTA parties decided last week to hold only one extra round of negotiations before the end of 2017, after previous announcements that seven rounds would be carried out before the end of this year. The decision was motivated by a stalemate reached during the fourth round of negotiations when some proposals made by the US were not well received by its Canadian and Mexican counterparts. The WTO-minus proposals made by US negotiations raised concerns over the likely success of the renegotiation process. Other controversial proposals included a sunset clause for the renewal of the agreement every five years, the elimination of the investor-state dispute mechanism and the more stringent rules of origin.
However, it is not likely that it would be Canada and/or Mexico who would put an end to NAFTA with a very thorny road ahead. Withdrawal from the US is also remote. Extensive legal debates on the matter include whether the US president could withdraw from the agreement without congressional approval and how far the executive’s powers go regarding foreign affairs relations. An arsenal of legal and judiciary tools will be ready to prevent and block such an outcome (see CRS).
In any case, a cooling off process after November is envisioned where Canadian and Mexican negotiations will take time to examine the ‘unconventional’ proposals made by the US in critical areas of the NAFTA renegotiation. With the current state of affairs could the Pacific Alliance use the deadlock in NAFTA renegotiation to its advantage? Does this issue have any significance to the role the Pacific Alliance plays in the region? It seems worthwhile exploring these questions at the geopolitical and economic levels.