MEXICO CITY: A key round of talks to update the Nafta trade pact formally opened on Friday, but within hours Canada was complaining about inflexibility by the United States, which is demanding big changes, a union leader said.

Canada and Mexico went into the talks prepared to address hard-line US demands that they had previously dismissed as unworkable, officials said.

But Canadian union leader Jerry Dias said Canada’s chief negotiator Steve Verheul told him in a private meeting that the US side was unwilling to budge.

“Steve Verheul in essence is saying the United States is not showing any flexibility,” Dias told reporters when asked what Verheul told him. Dias repeated his long-standing prediction that the talks would end in failure.

There is relatively little time left to thrash out a deal under the current schedule. Negotiators met in Mexico City for the fifth of seven planned rounds that are due to wrap up by the end of March to avoid affecting Mexico’s presidential election.

A spokesman for Canadian Foreign Minister Chrystia Freeland, who is in overall charge of the Nafta negotiating process, declined to comment on the remarks by Dias. A spokeswoman for US Trade Representative Robert Lighthizer also declined to comment.

US President Donald Trump, who says the North American Free Trade Agreement (Nafta) is a “disaster,” has frequently threatened to ditch the pact unless big changes are made.

“We’re just getting started. There’s a long ways to go. Its a challenging negotiation,” Verheul told reporters earlier in the day.

Canadian and Mexican officials initially indicated they would simply not discuss contentious US proposals such as a five-year sunset clause and boosting the North American content of autos to 85 per cent from the current 62.5pc.

The focus in Mexico City would be on making arguments to the US side as to why their proposals as written would not work, a Canadian government source said.

Canada, the source added, was happy to discuss so-called rules of origin governing auto content but insisted the 85pc figure was impossible.

Canadian sources said on Thursday they were open to a Mexican proposal to review Nafta every five years rather than the US plan to bring in a sunset clause that would automatically terminate the deal if it was not renegotiated.

The Trump administration on Friday issued revised Nafta negotiating objectives, largely to reflect demands that it has already made in the talks. These include new language in line with proposals to radically change dispute settlement systems, eliminate Canadian dairy tariffs and allow US protections for seasonal produce growers hurt by Mexican imports.

Unchanged is the US goal that Nafta be revised to shrink US trade deficits with Mexico and Canada.

Canada and Mexico both send a large majority of their goods to the United States and prefer the treaty continue rather than deal with the economic disruption caused by a US withdrawal.

But Mexico has also stepped up its efforts this year to find alternative markets.

Published in Dawn, November 19th, 2017