WASHINGTON — With critical political deadlines fast approaching, the Trump administration is racing to strike a deal on a revamped North American Free Trade Agreement by early May — with an eye toward forcing a congressional vote on a new pact by the end of the year.WASHINGTON — With critical political deadlines fast approaching, the Trump administration is racing to strike a deal on a revamped North American Free Trade Agreement by early May — with an eye toward forcing a congressional vote on a new pact by the end of the year.

After months of making little progress, recent statements from high-level trade officials meeting in Washington indicate that negotiations have been gaining momentum and that there’s a fair chance of reaching an agreement in principle in weeks or even days.

But as President Donald Trump’s chief trade negotiator, Robert Lighthizer, resumed talks Tuesday with his Canadian and Mexican counterparts, analysts say the three sides have yet to close the gap on several key issues, leaving many wondering whether there’s enough time. Canada and Mexico, rather than make politically unpopular concessions, may decide it better to prolong the talks, even at the risk of a U.S. withdrawal from NAFTA, as Trump has repeatedly threatened.

Moreover, Trump’s practice of lumping different issues together for bargaining leverage has increased uncertainties about the fate of negotiations. Last month, Trump gave an exemption to Canada and Mexico on hefty steel and aluminum tariffs, but only until May 1, saying what happens afterward would depend on how rewriting NAFTA comes along.

And on Monday, Trump suggested that a NAFTA overhaul should include another one of his goals, tighter control of people entering from the southern border. “Mexico, whose laws on immigration are very tough, must stop people from going through Mexico and into the U.S.,” the president said on Twitter. “We may make this a condition of the new NAFTA Agreement.”

The Trump administration has good political reason to wrap up NAFTA talks in the coming weeks. It wants to lock in a deal ahead of Mexico’s presidential election on July 1. Trump and his Republican backers also have their sights on the U.S. midterm elections. A successful conclusion to NAFTA talks could give a lift to the GOP and soften an expected loss of seats and possibly control of the House.

To meet that goal under congressional trade rules, Lighthizer would need to reach an agreement in principle in a matter of days to have a realistic chance for lawmakers to pass it in December. That is because the parties need time to write a text, give a mandated 90-day notice to Congress and have an economic impact report completed before Congress can vote it up or down. Trump is betting that his best shot for approval would come during the lame-duck session, when many lawmakers may be willing to take more difficult votes.
As part of the administration’s legislative strategy, Trump could give the required six months’ notice of withdrawal from NAFTA about the time a text is ready, essentially forcing Congress to accept the new accord or risk the end of the 24-year-old pact, according to trade experts.

“The status quo, which most members of Congress probably prefer, would not be an option,” wrote William Reinsch, a senior advisor at the Center for Strategic and International Studies, although he questioned the wisdom of employing such hardball tactics.

Such a move could inflame lawmakers. Nor is it clear whether Trump has the legal authority to pull out of NAFTA without congressional support. And many on Capitol Hill and Wall Street fear the potential political and economic fallout of termination. An end to NAFTA would cause tariffs to rise and create other barriers that would almost certainly hurt trade, production and investments throughout North America.
Settling the NAFTA talks would also allow the Trump administration to focus on another, more-fraught trade front with America’s biggest trading partner, China.

Already the tight political calendar has spurred Lighthizer to soften his demands to overhaul NAFTA rules on cars to increase auto and parts production in the United States.

Lighthizer dropped his initial push for a new 50 percent minimum of U.S.-local content before a vehicle can get NAFTA’s tariff-free treatment, and instead is looking at a different formula that could provide more work for American facilities. He has also shown a willingness to bend somewhat on his original proposal to raise the overall North American portion of the value of vehicles to 85 percent from the current 62.5 percent, meant largely to reduce reliance of parts from Asia in the assembly of cars and trucks.

But at the same time, Lighthizer has given little indication that he will make a broad retreat on major negotiating objectives, including eliminating or weakening certain NAFTA dispute-resolution mechanisms, revising government procurement rules in favor of American firms, and inserting a new, so-called sunset provision that would allow the U.S. to reopen NAFTA after a period of time.

Trump has repeatedly blasted NAFTA as a bad deal for America, blaming it for destroying domestic jobs and factories. But many economists point to factors such as automation for displacing U.S. workers and doubt that a revamped NAFTA would lead to a big renaissance in manufacturing jobs.

Lighthizer gave notice of renegotiating the agreement last spring in one of the administration’s first trade acts.
“This is where he sees creating a new American trade agreement model, and so he’s not going to just drop all those rebalancing and restructuring issues,” said Lori Wallach, director of Public Citizen’s Global Trade Watch, which has been a vocal critic of NAFTA. She added that it’s also an opportunity for Lighthizer to get a trade deal that can pass Congress, unlike the Trans-Pacific Partnership that languished without enough support.

Wallach, a lawyer and veteran trade analyst who has been monitoring the developments since talks began last August, said it was hard to assess the odds that Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland and Mexican Economy Secretary Ildefonso Guajardo will reach an agreement in principle in the next couple of weeks.

For Mexico, the political calculus includes a desire by the current government to enshrine certain rules on privatizing energy industries through NAFTA before a potentially new president takes office and makes that impossible. The opposition leftist candidate Andres Manuel Lopez Obrador has a big lead in the polls and is considered to be more nationalistic and protectionist than the current president, Enrique Pena Nieto.

Yet Mexican negotiators will be hard-pressed to accept U.S. demands aimed at pushing up Mexican wages, as well as restrictive rules on textiles and perishable produce, among other changes.

Congressional Democrats have urged Lighthizer to address Mexican workers’ rights to organize and bargain for higher pay — something that Rep. Sander M. Levin, D-Mich., a key proponent for tougher labor standards, says will be important if the Trump administration hopes to win Democratic votes for passage of a new NAFTA.

“They have been slowly, incrementally beefing up their proposal,” said Celeste Drake, a trade policy specialist at the AFL-CIO, referring to the Trump trade team’s labor demands. But Drake, one of several hundred business and other stakeholders with whom U.S. trade officials have shared specific negotiating proposals, said she has not yet seen the administration’s consolidated chapter on labor.

On balance, Mexican negotiators would prefer to make a deal and sign a NAFTA agreement before a new government is seated, analysts in Mexico said. But if the terms are too costly, they said, Mexican officials may decide it’s worth the risk to delay and call Trump’s bluff. Some analysts believe Trump will find it hard to act on his threat to withdraw given the intensity of internal political pressures that are likely to build.

“The U.S. administration is in some conundrum,” said Manuel Molano, an economist at the Mexican Institute for Competitiveness in Mexico City. “It is on the verge of a trade war with China, and if it also decides to cancel the agreement with Mexico and Canada, this could spell trouble for the U.S. economy.”

Canada’s prime minister, Justin Trudeau, isn’t up for election until the fall of 2019, and as such, may have more reason to try to extend negotiations in an effort to lessen any givebacks. Canadian officials have pushed back on, among other things, the Trump administration’s push to erase a legal mechanism to challenge U.S. dumping duties and to have Canada open up its sensitive dairy market to American producers.

“Canada is experiencing uncertainty from a NAFTA up-in-the-air that may be having an impact on investment and production decisions,” said Laura Dawson, director of the Wilson Center’s Canada Institute, a think tank.

“But overall, Canada is much more inclined to stay at the negotiations in order to get a good deal rather than accepting some sort of politically expedient turnoff.”

WASHINGTON — The European Union and Mexico on Saturday announced a major update to their existing free trade pact signed nearly two decades ago, a development that will allow almost all goods, including agricultural products, to move between Europe and Mexico duty-free.WASHINGTON — The European Union and Mexico on Saturday announced a major update to their existing free trade pact signed nearly two decades ago, a development that will allow almost all goods, including agricultural products, to move between Europe and Mexico duty-free.

The deal, which has yet to be formally signed, is expected to increase trade in dairy, pork, services, digital goods and medicines between the economies. It will also give Mexico greater access to an advanced consumer market, as negotiations with the Trump administration over the modernization of the North American Free Trade Agreement still appear to be on uncertain ground.

And it sends a message to Mr. Trump that some of America’s closest trading partners are moving ahead with deals of their own — potentially leaving American exporters on the losing end in foreign markets.

In its announcement, Mexico said the agreement would help modernize its existing commercial relationship.
Jean-Claude Juncker, the president of the European Commission, said in a statement that “trade can and should be a win-win process and today’s agreement shows just that.” He added, “With this agreement, Mexico joins Canada, Japan and Singapore in the growing list of partners willing to work with the E.U. in defending open, fair and rules-based trade.”

The European Union and Mexico said they had reached an agreement in principle on the most important elements of the agreement, with some technical details yet to be resolved. They are aiming to finalize it by year’s end, after which it must be ratified by the European Parliament and the Mexican Senate.The European Union and Mexico said they had reached an agreement in principle on the most important elements of the agreement, with some technical details yet to be resolved. They are aiming to finalize it by year’s end, after which it must be ratified by the European Parliament and the Mexican Senate.

The original trade pact, signed in 1997, was relatively narrow, mainly eliminating tariffs on cars and machinery. The deal came into force in 2000 and was the first free trade pact between Europe and a Latin American country.Since then, the European Union has added 13 members, and the internet has dramatically changed global business. In May 2016, the countries started negotiations to update the pact. The revised deal adds in a variety of new rules governing agricultural goods, telecommunications, digital trade, intellectual property, climate change, anti-corruption measures, finance and energy.Since then, the European Union has added 13 members, and the internet has dramatically changed global business. In May 2016, the countries started negotiations to update the pact. The revised deal adds in a variety of new rules governing agricultural goods, telecommunications, digital trade, intellectual property, climate change, anti-corruption measures, finance and energy.

The deal is particularly notable for giving Mexico access to another wealthy market similar to the United States. The European Union is Mexico’s second-biggest export market after the United States. Yet it is a distant second to the United States, where roughly 80 percent of Mexican exports go.

Mr. Trump has called those close economic ties into question by starting an ambitious renegotiation of the North American Free Trade Agreement. Nafta negotiators say they may be close to finalizing a deal in the coming weeks. But much uncertainty remains, as the United States, Mexico and Canada continue to advocate for vastly different measures.

Fredrik Erixon, director of the European Centre for International Political Economy, a Brussels-based research organization, said that Mr. Trump’s aggressive posture on trade had pushed Mexico toward negotiations with Europe.

“The E.U. has for at least 10 years been knocking on the door of Mexico to upgrade the trade agreement, and it is only very recently that they have come along,” he said. “It’s perfectly obvious that what has prompted them to change their minds is Donald Trump.”

The Mexican peso dove Thursday amid ongoing political uncertainty and as North American trade partners met to negotiate a new NAFTA deal.The Mexican peso dove Thursday amid ongoing political uncertainty and as North American trade partners met to negotiate a new NAFTA deal.
The peso was down 1.42% versus the dollar at 12:41 p.m. ET, erasing previous gains. It had been strengthening against the greenback on Wednesday.
The fall comes after news of strong support for Andres Manuel Lopez Obrador, who on the ballot in Mexico’s presidential election in July. A poll released earlier this week showed Obrador, a staunch leftist, with a 22 point lead in the race. 
Elsewhere, Mexican officials are in the midst of NAFTA negotiations. The country’s foreign minister and economy minister are meeting with President Donald Trump’s son-in-law Jared Kushner and US Trade Representative Robert Lighthizer on Thursday and Friday to push for an early deal.

German engineering company Bosch says it is making a large investment in Mexico by building a plant in Celaya. It will be needed to meet rising demand in electronics components for the auto industry.

German auto parts supplier Bosch said Tuesday it planned to build a new plant in Mexico’s state of Guanajuato despite current uncertainty over US tariffs on imported vehicles.

By 2019, Bosch is to invest over €100 million ($124 million) in the Celaya factory, which is to produce electronic components, also for networked mobility systems.

The company said Mexico remained an important market and a hub for global manufacture and development.Bosch already operates 12 production sites in Mexico employing some 16,000 workers. The new Celaya plant is set to create 1,200 additional jobs.

All eyes on NAFTAAll eyes on NAFTA”We have a clear strategy to produce locally,” the head of Bosch Mexico, Rene Schlegel, told the DPA news agency, adding that vehicle production in the North American market was going well.

“The capacity that we currently have in electronics components for the automotive sector will not suffice to cover rising demand,” he said.

“With the new plant, we’ll be adding capacity.”Mexico has been a major automotive production location for many companies for years. At the moment, the North American Free Trade Agreement between Mexico, Canada and the US is being renegotiated after coming under pressure from the Trump administration.Bosch expects some changes to the NAFTA pact, but is confident that it will not be scrapped altogether.

LIMA/MEXICO (Reuters) – The United States, Mexico and Canada will expedite NAFTA talks in a push to reach a deal in coming weeks, Mexico’s president said on Saturday after a meeting with the U.S. vice president and Canadian prime minister.LIMA/MEXICO (Reuters) – The United States, Mexico and Canada will expedite NAFTA talks in a push to reach a deal in coming weeks, Mexico’s president said on Saturday after a meeting with the U.S. vice president and Canadian prime minister.

On the sidelines of the Summit of the Americas in Lima, Peru, Mexican President Enrique Pena Nieto, U.S. Vice President Mike Pence and Canadian Prime Minister Justin Trudeau said they thought an agreement could be reached before Mexican elections on July 1, although they also said no deadlines had been set.

“We agreed to keep up work towards reaching a deal and to summon our special negotiating teams to accelerate their efforts,” Pena Nieto told reporters after meeting Pence.

“It was the same thing I agreed to with Prime Minister Trudeau,” Pena Nieto added. “We hope in coming weeks we can reach an agreement.”

The three countries, which created the world’s largest free trade region by forming the North American Free Trade Agreement (NAFTA) in the 1990s, are under pressure to renegotiate the deal before Mexicans elect a new president in July.

There are concerns U.S.-Mexico relations could get rockier with Pena Nieto, a centrist, unable to seek a second six-year term due to Mexico’s term limits.

U.S. President Donald Trump has threatened to kill NAFTA if it is not changed to secure better terms for U.S. workers and companies. In Mexico, leftist presidential frontrunner Andres Manuel Lopez Obrador has vowed to cut the country’s economic dependence on foreign powers and to put Trump “in his place.”

With U.S. mid-term congressional elections also pending in November, Trudeau said Canada would defer to Mexico and the United States on a timeline.

“Of course, we’d like to see a re-negotiated deal land sooner than later,” Trudeau said in a press conference, citing Mexican and U.S. elections as a factor in timing. “We have a certain amount of pressure to try to move forward successfully in the coming weeks.”

On Friday, U.S. Commerce Secretary Wilbur Ross said provincial elections in Canada in June were also a factor, and that a deal in May was possible.

Trudeau told reporters there has been “potential progress” regarding car manufacturing and “a broad range of things”, however, no new details have emerged from the Lima conference on any specific agreements.

On Friday, auto industry executives said U.S. trade negotiators significantly softened their demands to increase regional automotive content under a reworked NAFTA trade pact in an effort to seal a deal in the next few weeks.

After meeting Pena Nieto and Trudeau separately, Pence said he was leaving the summit “very hopeful that we are very close to a renegotiated NAFTA.”

“There is a real possibility that we could arrive at an agreement within the next several weeks,” Pence said.

MEXICO CITY—Trade negotiators from the U.S., Canada and Mexico are looking to agree on a revamp of the North American Free Trade Agreement in early May, Mexico’s Economy Minister Ildefonso Guajardo said Monday.MEXICO CITY—Trade negotiators from the U.S., Canada and Mexico are looking to agree on a revamp of the North American Free Trade Agreement in early May, Mexico’s Economy Minister Ildefonso Guajardo said Monday.

“There’s a very high probability of reaching an agreement in principle, an 80% chance,” Mr. Guajardo said in an interview on the Televisa network.

U.S. negotiators have accelerated negotiations and want to reach a deal in principle that they can present to the U.S. Congress under the existing trade promotion authority.

Mr. Guajardo, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland met in Washington last week seeking to step up negotiations and clear roadblocks on the most controversial issues, such as rules of origin for cars and light trucks manufactured in North America.

Mr. Guajardo said there were no conditions to reach an agreement in principle at that meeting, but that trade teams agreed to be in “permanent talks” instead of having a formal eighth round of negotiations. “The teams are in Washington,” he said.

The official confirmed that negotiators are discussing a proposal from the U.S. that calls for certain vehicle parts to be made in zones where wages average at least $15 an hour, which excludes Mexico, as part of the content calculation.

“The proposal would be aspirational, unreachable for Mexico in the short-term,” because the country doesn’t have such wage levels, he said. But the U.S. government first needs to reach an agreement with its own car manufacturers on such a plan.

“The devil is in the details,” Mr. Guajardo added. With U.S. eagerness to reach a deal soon, “when there’s urgency, there must be flexibility,” he said.

The Nafta countries originally set January 2018 as the goal for concluding Nafta talks, then pushed the deadline to March 31.

China hit back quickly on Wednesday against the Trump administration’s plans to impose tariffs on $50-billion in Chinese goods, retaliating with a list of similar duties on key U.S. imports including soybeans, planes, cars, beef and chemicals.

The speed with which the trade struggle between Washington and Beijing is ratcheting up – China took less than 11 hours to respond with its own measures – led to a sharp selloff in global stock markets and commodities.

U.S. President Donald Trump, who has long charged that his predecessors served the United States badly in trade matters, rejected the notion that the tit-for-tat moves amounted to a trade war between the world’s two economic superpowers.

“We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.,” Trump wrote in a post on Twitter early on Wednesday.

Because the actions will not be carried out immediately, there may be room for maneuver. Publication of Washington’s list starts a period of public comment and consultation expected to last around two months. The effective date of China’s moves depends on when the U.S. action takes effect.

U.S. Commerce Secretary Wilbur Ross said in an interview with CNBC that it would not be surprising if the U.S. and China trade actions led to negotiations, although he would not speculate on when this might happen.

Investors were wondering, nonetheless, how far one of the worst trade disputes in many years could escalate.

“The assumption was China would not respond too aggressively and avoid escalating tensions. China’s response is a surprise for some people,” said Julian Evans-Pritchard, senior China economist at Capital Economics, noting that neither side had yet called for enforcement of the tariffs.

“It’s more of a game of brinkmanship, making it clear what the cost would be, in the hopes that both sides can come to agreement and none of these tariffs will come into force,” said Evans-Pritchard.

U.S.-made goods that appear to face added tariffs in China based, on an analysis of Beijing’s list, include Tesla Inc electric cars, Ford Motor Co’s Lincoln auto models, Gulfstream jets made by General Dynamics Corp and Brown-Forman Corp’s Jack Daniel’s whiskey.

Unlike Washington’s list, which was filled with many obscure industrial items, China’s list strikes at signature U.S. exports, including soybeans, frozen beef, cotton and other key agricultural commodities produced in states from Iowa to Texas that voted for Trump in the 2016 presidential election.

“China is also trying to weaken our will by targeting certain segments of our economy,” White House trade adviser Peter Navarro said in an interview with National Public Radio.

“But let’s remember: we buy five times more goods than they buy from us. They have a lot more to lose in any escalation in this matter.”

POLITICAL TARGETS

While Washington targeted products that benefit from Chinese industrial policy, including its “Made in China 2025” initiative to replace advanced technology imports with domestic products in strategic industries such as advanced IT and robotics, Beijing’s appears aimed at inflicting political damage.

Tobacco and whiskey, for example, are both on Beijing’s list and are produced in states including Kentucky, home of Senate Majority Leader Mitch McConnell.

Beijing’s list of 25 per cent additional tariffs on U.S. goods covers 106 items with a trade value matching the $50-billion targeted on Washington’s list, China’s commerce and finance ministries said.

“This is a real game changer and moves the trade dispute away from symbolism to measures which would really hurt U.S agricultural exports,” said Commerzbank commodities analyst Carsten Fritsch.

China’s tariff list covers aircraft that would likely include older models such as Boeing Co’s workhorse 737 narrowbody jet, but not newer models like the 737 MAX or its larger planes.

A Beijing-based spokesman for Boeing, the largest single U.S. exporter to China, declined to comment.

Beijing’s announcement triggered heavy selling in global financial markets, with U.S. stock futures sliding 1.5 per cent and U.S. soybean futures plunging nearly 5 percent and on track for their biggest fall since July 2016. The dollar briefly extended early losses, while China’s yuan skidded in offshore trade.

RAPID RESPONSE

Hours earlier, the U.S. government unveiled a detailed breakdown of some 1,300 Chinese industrial, transport and medical goods that could be subject to 25 per cent duties, ranging from light-emitting diodes to machine parts.

The U.S. move, broadly flagged last month, is aimed at forcing Beijing to address what Washington says is deeply entrenched theft of U.S. intellectual property and forced technology transfer from U.S. companies to Chinese competitors, charges Chinese officials deny.

Foreign ministry spokesman Geng Shuang said China had shown sincerity in wanting to resolve the dispute through negotiations.

“But the best opportunities for resolving the issues through dialog and negotiations have been repeatedly missed by the U.S. side,” he told a regular briefing on Wednesday.

The tariff list from the office of U.S. Trade Representative Robert Lighthizer followed China’s imposition of tariffs on $3-billion worth of U.S. fruits, nuts, pork and wine to protest U.S. steel and aluminum tariffs imposed last month by Trump.

WILL CONSUMERS PAY?

Many consumer electronics products such as cellphones made by Apple Inc and laptops made by Dell were excluded from the U.S. list, as were footwear and clothing, drawing a sigh of relief from retailers who had feared higher costs for American consumers.

A U.S. industry source said the list was somewhat unexpected in that it largely exempts major consumer grade technology products, one of China’s major export categories to the U.S.

“The tech industry will feel like overall it dodged a bullet,” the source said, but added that traditional industrial goods manufacturers, along with pharmaceuticals and medical device firms, could suffer.

Many U.S. business groups support Trump’s efforts to stop the theft of U.S. intellectual property but have questioned whether tariffs are the right approach. They warn that disruptions to supply chains that rely on Chinese components will ultimately raise costs for consumers.

“Tariffs are one proposed response, but they are likely to create new challenges in the form of significant added costs for manufacturers and American consumers,” National Association of Manufacturers President Jay Timmons said in a statement.

ALGORITHM SHIELDS U.S. CONSUMERS

USTR developed the tariff targets using a computer algorithm designed to choose products that would inflict maximum pain on Chinese exporters but limit damage to U.S. consumers.

A USTR official said the list got an initial scrub by removing products identified as likely to cause disruptions to the U.S. economy and those that needed to be excluded for legal reasons.

“The remaining products were ranked according to the likely impact on U.S. consumers, based on available trade data involving alternative country sources for each product,” the official, who spoke on condition of anonymity, told Reuters.

Many products in those segments appear on the list, including antibiotics and industrial robots and aircraft parts.

USTR did include some key consumer products from China, including flat-panel television sets and motor vehicles, both electric and gasoline-powered, with engines of 3 liters or less.

A Reuters analysis that compared listed products with 2017 Census Bureau import data showed $3.9-billion in flat-panel TV imports, and $1.4-billion in vehicle imports from China.

USTR has scheduled a May 15 public hearing on the tariffs, which were announced as the result of an investigation under Section 301 of the 1974 U.S. Trade Act.

China ran a $375-billion goods trade surplus with the United States in 2017, a figure that Trump has demanded be cut by $100-billion.

Mexico’s top presidential candidates launched their campaigns today vowing to take a harder line against Donald Trump, with the leftist front-runner vowing his country is done being the US president’s “pinata.”

Just as candidates were putting the finishing touches on their opening campaign speeches for Mexico’s July 1 elections, Trump crashed the kick-off party via Twitter, accusing the country of doing “very little” to stop illegal migration and drugs, and renewing his threat to axe the North American Free Trade Agreement (NAFTA).

The veteran leftist leading in the polls, Andres Manuel Lopez Obrador, and his conservative rival, Ricardo Anaya, both hit back hard at the Republican president, whose anti-Mexican diatribes and insistence that Mexico pay for his planned border wall have made him supremely unpopular here.

“We are going to be very respectful toward the United States government, but we are also going to demand that (the United States) respect Mexicans,” Lopez Obrador told a cheering crowd in Ciudad Juarez, on the US border.

“Neither Mexico nor its people will be the pinata of any foreign government.”

Lopez Obrador, a former Mexico City mayor, repeated his long-standing criticism of Trump’s planned border wall.
“Let this be heard near and far: neither security issues nor social problems can be resolved with walls,” he said, condemning Trump’s “mistaken foreign policy” and “contemptuous attitude toward Mexicans.”

Anaya, who is locked in a brutal battle for second place with ruling party candidate Jose Antonio Meade, vowed to answer Trump with a “strong and dignified stance,” and defied the US president to take action on security issues on his own side of the border.

“Just as the United States is worried about undocumented migrants, Mexico is worried about gun trafficking,” he said.

“Eighty percent of the guns used to kill people in our country come from the United States,” he added, in reference to a wave of drug cartel-fueled violence that has left more than 200,000 people dead in Mexico since 2006.

MEXICO CITY (Reuters) – U.S. trade negotiators have floated a plan to introduce rules under a reworked NAFTA that stipulate a certain amount of automotive production must be carried out in areas paying higher salaries, two sources familiar with the matter said.

Setting such wage requirements for the auto industry under the North American Free Trade Agreement could benefit the United States and Canada, whose trade unions say that lower Mexican pay has caused a drift in manufacturing capacity to Mexico.

The U.S. plan aims to explore what percentage of output could be in areas paying higher salaries, and at what levels of remuneration the scheme could be targeted, said one of the two sources, who spoke on condition of anonymity.

Mexico’s government and its NAFTA partners were all analyzing the U.S. idea, the source said.

The news follows a week in which hopes have risen that the United States, Mexico and Canada could be closer to brokering agreement on one of the thorniest issues surrounding renegotiation of NAFTA – content levels for the auto industry.

Last week, industry sources said that the United States had withdrawn a divisive demand that at least 50 percent of NAFTA auto content should come from the United States.

The wage idea was floated after that, the sources said.

The United States, which also wants to raise the minimum auto content threshold for the NAFTA region to 85 percent from 62.5 percent, is exploring setting a wage floor at $15 per hour for the salary component, the second of the sources said.

However, if a deal is reachable, it would likely end up at a lower level than that, the source added.

Mexico’s economy ministry had no comment on the matter, a ministry spokesman said.

Alex Lawrence, a spokesman for Canadian Foreign Minister Chrystia Freeland, said it was a question for the office of U.S. Trade Representative (USTR) Robert Lighthizer “as to whether they are going to present something along those lines.”

A USTR spokeswoman could not immediately be reached for comment.

Freeland’s office said she would be meeting her NAFTA counterpart Mexican Economy Minister Ildefonso Guajardo on Friday in Toronto to discuss the ongoing renegotiation.

U.S. President Donald Trump has railed against jobs migrating from the United States to Mexico, and threatened to dump the trade deal if it cannot be reworked to his liking.

Making tariff-free access for the industry under NAFTA dependent on using higher-cost labor could reduce the allure of Mexico either by making the target unreachable, or by obliging auto makers to pay higher salaries to Mexican workers.

That could send more work to U.S. or Canadian plants.

Progress on auto rules have spurred optimism that the three sides, which have been locked in sluggish talks for months, could reach a deal “in principle” in the coming weeks.

No date has yet been agreed for another formal round of talks, one of the sources said. Mexico said earlier this month the talks had been tentatively set for April 8 in Washington.

MEXICO CITY (Reuters) – Mexican grocer Chedraui, a powerhouse in the fast-growing Latino market in the United States, said on Sunday it had bought smaller U.S. grocery store chain Fiesta Marts for an undisclosed amount.

Grupo Comercial Chedraui (CHDRAUIB.MX), as the company is formally know, announced the acquisition of Texas-based Fiesta Marts’ 63 stores in a brief statement on Sunday, emphasizing how the deal will strengthen its reach with Mexican-American shoppers.

Chedraui, based in Veracruz state, already runs 59 El Super grocery stores, mostly in California but also in other southwestern U.S. states, where shoppers are courted with Spanish-language ads promising the lowest price.

Burt Flickinger, a grocery sector consultant with Strategic Resource Group, said the acquisition will likely make the company the top retailer for Spanish-speaking shoppers in the United States, besting even retail giants like Walmart for the coveted demographic.

“El Super is (already) a fierce winner in the wars in the stores, he said, referring to the chain’s dominance with Latino consumers.

The group is the fastest growing consumer constituency in the United States, he added.

In Mexico, Chedraui operated 170 stores as of the end of last year.

The company said earlier this year it expects to invest around 3.8 percent of its consolidated revenue in assets, which it said should see sales growth reach as high as 6 percent in 2018.

Chedraui’s sales growth totaled 3.3 percent last year.