Mexico private sector leader sees positive signs on NAFTA

MEXICO CITY/OTTAWA (Reuters) - Talks to rework the North American Free Trade Agreement (NAFTA) are opening a window of opportunity that might allow the United States, Mexico and Canada to reach a basic deal in the coming weeks, a Mexican private sector business leader said on Monday.

U.S. Trade Representative Robert Lighthizer said on March 5 that negotiators had a matter of weeks to reach an agreement "in principle," and last week industry sources said the U.S. team had withdrawn one of its most contentious demands.

The head of Canada's Unifor union, Jerry Dias, and others said that Washington had dropped its insistence that all autos made in NAFTA countries have 50 percent U.S. content.

Moises Kalach, head of the international negotiating arm of the CCE business lobby, which represents the Mexican private sector at the talks, said that news had fuelled hopes that a deal on NAFTA might be attainable.

"There are positive signs that there is the will, and that the window of opportunity we were looking at, is happening," he told Reuters by telephone.

Kalach said the United States had yet to put forward a revised proposal for autos, and that it remained to be seen whether U.S. negotiators would drop other "toxic" demands.

However, if negotiators could conclude around eight NAFTA chapters that were close to completion, it would make it easier to focus on the sticking points, he added.

"It gets that off the table. And if there really is the will to get an agreement in principle on the other issues, it'll be in the coming weeks," he said. "One needs to be prepared for that."

Major differences of opinion remain on NAFTA, and Mexican officials have for months been looking forward to close sections of the revamped accord that are still unresolved.

Among those bones of contention are Washington's desire to limit access to its agricultural markets, to impose a so-called sunset clause that could automatically kill NAFTA after five years and proposed changes to dispute-resolution mechanisms.

Dias of Unifor, a critic of NAFTA who has close ties to Ottawa's negotiators, said he was sceptical about a deal in principle being agreed with so many issues outstanding.

"I heard the United States was looking for an agreement in principle to work out the details later," he told Reuters. "What I understand is that it got no traction because I had spoken to the Canadian team and we almost had a chuckle over it."

Neither the Canadian nor the Mexican government had any immediate comment.

U.S. President Donald Trump says NAFTA has boosted Mexican manufacturing at the expense of U.S. workers, and he has vowed to dump the accord if it is not reworked to his liking.

(Reporting by Dave Graham in Mexico City and David Ljunggren in Ottawa; Editing by Sandra Maler)