Mexico and Canada Reject US NAFTA Demands

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"We disagree with some of the proposals presented by the United States but we're not rejecting anything outright and we're still committed to the NAFTA negotiations", a source close to the Canadian delegation said. "To that end, the parties plan on having a longer inter-sessional period before the next negotiating round to assess all proposals". The talks are now scheduled to resume in Mexcio City on November 17-21.

Mexico also opposed the five-year provision, known as a sunset clause, the Mexican source said. Both counties also oppose US proposals designed to create jobs for American auto manufacturers by putting more stringent limits on how much of a vehicle can be made outside of North America to qualify for immunity to import taxes in the three NAFTA countries. It doesn't matter if the vehicle parts are made in Mexico, Canada or the United States, as long as they were produced in North America.

The U.S. proposal would also require that cars sold into the United States be 50 percent manufactured here in order to qualify for special NAFTA status.

So instead of one rule for all of North America, the Trump administration is suggesting two - one for the US, one for all of North America.

Washington has also called for an end to certain forms of trade dispute arbitration and for USA content requirements for auto manufacturing, which the auto industry itself opposes. However, Mexican Economy Secretary Ildefonso Guajardo told CNNMoney in April that such a proposal wouldn't work for him.

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Canada and Mexico have locked arms in opposition to a USA proposal that the trade agreement should come up for renewal every five years, a change meant to assure that the agreement stay up-to-date as the economies of the three countries change over time.

"There is no one trade agreement in the world that has country-specific content".

Lighthizer said he has see no sign that Mexico and Canada are ready to make the major changes needed to the update pact.

"Simply put, we can not afford for the United States to abandon free trade", Hun Quach, the group's head of trade policy, said in an emailed statement.