It’s been one year since the United States, Canada and Mexico began discussions to renegotiate the 24-year-old North American Free Trade Agreement. And a year later, it’s still unclear what will become of the agreement.
Bloomberg recapped the year-long discussions thus far last Thursday and the three countries allegedly came close to finalizing an agreement this past May. However, a controversial “sunset clause” kept Canada and Mexico away from a final deal. The sunset clause calls for the agreement to terminate unless all countries sign on again in five years.
However, momentum has built once again as Mexico and the U.S. have reportedly reached a stage where both countries agree to current proposals. Canada has reportedly shied away from the current variations. And there’s still a chance the U.S. could negotiate separate agreements with both Mexico and Canada, though both other countries prefer a trilateral agreement still.
For business leaders, and specifically automakers, the talks still keep future product plans on ice. And the threat of the U.S. leaving the agreement altogether is still very real. With mid-term elections quickly approaching, it may also become doubly difficult to have the U.S. Congress ratified a new agreement.