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A key round of talks to update the North American Free Trade Agreement (Nafta) 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.
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.
"We're just getting started. There's a long ways to go. It's 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 percent from the current 62.5 percent.
Canada, the source added, was happy to discuss so-called rules of origin governing auto content but insisted the 85 percent 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.
Sending a message
But Mexico has also stepped up its efforts this year to find alternative markets.
Mexico's Foreign Minister Luis Videgaray met with his Russian counterpart Sergei Lavrov in Moscow on Friday to emphasise openness to doing business with nations other than the United States.
"At the same time as we carry out this negotiation process, Mexico is expanding its commercial horizons," Videgaray told a news conference. A senior official in Mexico's foreign ministry said the remarks were intended to send a message to Washington that "we don't depend on them."
A Mexican official said the United States needed to make clear what it hoped to achieve with tougher rules of origin, given the difficulty of raising the threshold.
Noting that 85 percent North American content was not feasible, the official said Mexico did not want "a rupture" to occur in the talks.
"Once (the Americans) have explained all that, we can see about finding common ground," the Mexican official said.