The sixth round of North American Free Trade Agreement (NAFTA) talks, recently concluded in Montreal, showed progress with an agreement to close the chapter related to anti-corruption. Mexico led efforts to address graft and bribery and the three partner nations (Mexico, US, Canada) agreed on increasing transparency in their laws, encouraging due process in legal cases and promoting integrity among public officials. Such measures mirror those that were previously agreed upon in the Trans-Pacific Partnership (TPP) that President Donald Trump withdrew the US from early in his administration.
The measures are important specifically to Mexico to reassure companies investing and doing business in its borders as well as to attract new investment. In 2016, Mexico ranked 123 out of 176 in Transparency International’s Corruption Perception Index. According to its website, the lower-ranked countries are plagued by untrustworthy and poorly functioning public institutions and businesses frequently face bribery, extortion and official indifference when seeking to address authorities.
Talks to modernize the accord launched in August and are scheduled until March, but that deadline may be extended into 2019 as agreement on difficult issues has been slow. Trump’s statement that “We have a good change of renegotiating NAFTA” along mixed signals on any certain position in regards a US withdraw are giving stakeholders confidence.
The five most difficult issues under negotiation include a proposal to require more auto manufacturing in US, seasonal barriers to agricultural trade, access to US procurement deals, dispute resolution mechanisms, and a five-year sunset clause requiring constant renewal.
Montreal talks are ending with negotiators noting positive suggestions in regards the sunset review, origin of automotive parts rules, and reducing regulatory burdens that have some regional exporters not using the accord.