While U.S. Trade Representative Robert Lighthizer said he was confident the U.S-Mexico-Canada trade agreement would come up for a vote and pass, Trump told him in front of reporters that he knows “these people” better, referring to Democrats.

“I don’t think Nancy Pelosi will have time,” said Trump. “She’s wasting her time on a, you know let’s use a word that they used to use a lot: a ‘manufactured crisis.'”

Pelosi announced on Tuesday that Democrats in the House of Representatives had launched a formal impeachment inquiry into Trump, accusing him of seeking foreign help to smear Democratic rival Joe Biden ahead of next year’s election.

“I don’t know whether or not they’re going to have time to do any deals,” Trump said. “I don’t think they can do any deals. You know, we were working on guns, gun safety.”

Canada, the U.S. and Mexico signed the agreement last year to replace the trillion-dollar North American Free Trade Agreement (NAFTA), and it must now be ratified.

Lighthizer later said was confident the trade pact would come up for a vote because it is an extremely good agreement and “if it did not pass it would be a catastrophe for our economy.”

He said the legislation should be modified to address Democrats’ concerns, including reservations about the enforceability of the labor and environment provisions.

Mexico, Canada urge ratification

Mexican President Andres Manuel Lopez Obrador said the deal should be passed by the U.S. Congress quickly, not left until closer to the November 2020 U.S. presidential election.

“It’s better if this gets resolved soon. It’s in the interest of all three nations,” Lopez Obrador told journalists at a daily media briefing.

Canadian Prime Minister Justin Trudeau said, “We’ve always been focused on the ratification of the USMCA in a way that tries to go beyond the partisan differences in the United States.”

“Our focus remains on ensuring that this deal… goes forward and that’s what we are going to remain focused on,” said Trudeau.

Mexico’s peso slipped as much as 0.9 per cent versus the dollar to an almost three-week low, and the benchmark Mexican stock index fell as much 1.24 per cent, with banks citing the impeachment inquiry as sapping investor appetite for risk. Both the peso and stock index recovered slightly in later trading.

The Canadian dollar has been little changed at about 1.326 to the U.S. dollar, or 75.41 U.S. cents since the launch of a formal impeachment inquiry. The Toronto stock market has fallen about 0.7 per cent since Monday as lower oil prices weighed on energy stocks.

Capital Alpha Partners said it lowered its estimated likelihood of passage for USMCA to 30 per cent. “USMCA is on life support,” said James Lucier, analyst for the firm.

— Reporting for Reuters by Jeff Mason; writing by Mary Milliken and Anthony Espisito; additional reporting by Andrea Shalal in Washington, David Ljunggren in Delta, B.C., Fergal Smith in Toronto and Miguel Angel Lopez in Mexico City.

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President-elect Andres Manuel Lopez Obrador said Canadian Prime Minister Justin Trudeau asked him during a Thursday phone call “to intervene and call on the U.S. government to reach an agreement” with Canada. “We agreed to that.”

But Lopez Obrador, who takes office on Dec. 1, said the NAFTA language between Washington and Mexico City was now final.

“We are not going to re-open the negotiation. That you can be sure of,” Lopez Obrador told reporters in Mexico City.

Even so, Lopez Obrador said “the negotiation is not closed” between the U.S. and Canada, and said he had received information that the Trump administration has made a new counterproposal to Ottawa.

Queries to Canadian officials and the U.S. Trade Representative’s office to verify the U.S. proposal were not immediately answered.

Mexican Economy Minister Ildefonso Guajardo was scheduled to present the text of the Aug. 27 agreement, which aims to rebalance auto trade and modernize parts of NAFTA, to Mexico’s Senate at 7 p.m. ET, Mexican government and Senate sources said.

Mexican Senator Ricardo Monreal said on Twitter the text would be released simultaneously in Mexico and the U.S. A USTR spokesman declined comment on the timing.

The text of the U.S.-Mexico deal needs to be published by late Sunday night — 60 days ahead of the Nov. 30 deadline for Trump and Mexico’s outgoing president, Enrique Pena Nieto, to sign the deal before Lopez Obrador takes office on Dec. 1.

U.S. Trade Representative Robert Lighthizer has argued that the U.S. would have to reopen negotiations with the new Mexican government if the deadline is missed, but Lopez Obrador’s comments appear to call that into question.

Canada’s Liberal government says it does not feel bound by the latest NAFTA deadline, and it repeated on Friday that it would not bow to U.S. pressure to sign a quick deal.

“We are in a very tough negotiation with the United States over NAFTA… there is no deadline on this. As far as we are concerned we want a deal that is good for Canadians and that’s the bottom line,” Transport Minister Marc Garneau told reporters in Ottawa.

Some U.S. Democratic lawmakers said on Thursday they could not support a NAFTA deal without Canada.

“Canada is exceptionally important. I think it would be malpractice, both for economic and political reasons, not to have a major agreement with Canada,” said Senator Ron Wyden, the top Democrat on the tax and trade Senate Finance Committee.

President Donald Trump, a Republican who blames the 1994 NAFTA pact for the loss of U.S. manufacturing jobs, trumpeted the deal with Mexico as a win for Americans and threatened to close the door on Canada if it did not sign on by Sept. 30.

Trump also floated slapping auto tariffs on Canada, which could sow disarray in supply chains, take the wind out of the sails of a resurgent Canadian economy and rattle investors already unnerved by an escalating U.S.-China trade war.

Auto trade

The U.S.-Mexico text will flesh out an agreement in principle that aims to rebalance automotive trade between the two countries and update NAFTA with new chapters on digital trade and stronger labour and environmental standards.

It is expected to conform to details previously released on auto rules requiring an increase in regional value content to 75 per cent from 62.5 per cent previously, with 40 per cent to 45 per cent coming from “high-wage” areas, effectively the U.S.

Auto industry executives say it is unlikely those targets can be met if Canada is not part of the deal, given supply chains that crisscross NAFTA borders multiple times.

Details also are expected on a side-letter that preserves the Trump administration’s ability to impose global national security tariffs on imports of autos and auto parts, granting Mexico a quota for tariff-free exports to the United States that allows some expansion of production.

And more light is likely to be shed on the enforcement of new labour standards and trade dispute settlement arrangements. The U.S. has said Mexico agreed to eliminate a system of settlement panels to arbitrate disputes over anti-dumping and anti-dumping tariffs.

But a Mexican source close to the talks said the U.S. had in turn agreed to drop a demand for tariffs to protect U.S. seasonal produce growers.

Mexico also secured an exemption from U.S. “global safeguard” tariffs such as those imposed in January on washing machines and solar panels, the source said. Mexican-made products were hit by those actions, which were aimed at protecting U.S. producers from import surges.

The release of the trade deal text starts a months-long process for U.S. congressional approval that will require a lengthy analysis by the independent U.S. international Trade Commission and notification periods before an up-or-down vote.

Lawmakers briefed by Lighthizer said he told them the earliest a vote could occur, either on a U.S.-Mexico deal or a trilateral deal including Canada, would be February or March 2019, after the U.S. Congress elected in November is sworn in.

— Reporting for Reuters by David Lawder in Washington and Anthony Esposito in Mexico City; additional reporting by Ana Isabel Martinez and Diego Ore in Mexico City and David Ljunggren in Ottawa; writing by David Lawder and Paul Simao.

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The failure to secure a quick deal underscores uncertainty over the North American Free Trade Agreement, which U.S. President Donald Trump on Friday said “has been a horrible, horrible disaster for this country.”

Trump, who blames the 1994 pact for U.S. manufacturing job losses to lower-cost Mexico, often threatens to walk away unless the other two member countries agree to major changes.

After meeting for barely half an hour on Friday, the top Mexican and Canadian politicians involved in the talks to update the agreement made it clear that big differences remained.

Canadian Foreign Minister Chrystia Freeland said officials would continue working in Washington while ministers returned home for consultations.

“We plan to meet again as needed, which I think will be soon… The negotiation will take as long as it takes to get a good deal,” she told reporters after the meeting.

Pressure to reach a deal increased this week after Speaker Ryan said he needed to be notified of a new NAFTA by May 17 to give the current Congress a chance of passing it.

U.S. Trade Representative Robert Lighthizer has said he wants a deal in place soon to avoid potential political problems stemming from Mexico’s July 1 presidential vote and U.S. midterm congressional elections in November.

In a statement, Lighthizer said the U.S. was ready to continue working with Mexico and Canada but made no mention of a deadline.

Friday’s talks were the first involving all three of the top officials in the NAFTA negotiations — Freeland, Mexican Economy Minister Ildefonso Guajardo and Lighthizer — since the latest round started on Monday.

Mexico has not agreed to a U.S. proposal to boost North American content for autos made in the NAFTA region, one of the main sticking points. Guajardo said his team tried hard during the week to bridge the gap.

“We’re not going to sacrifice the quality of an agreement because of pressure of time,” he said.

Financial markets are nervous about the damage a U.S. withdrawal could inflict on the highly integrated North American economy. Canada’s central bank governor and other policymakers complain that uncertainty over the pact is hitting business investment.

Guajardo, who wants to reach an agreement on all the principal aspects of a modernized NAFTA before sealing a new deal, says plenty of other issues were outstanding.

Drafting new rules of origin governing what percentage of a car needs to be sourced from the NAFTA region to avoid tariffs has been at the center of the talks.

It forms a key plank of the Trump administration’s aim to boost jobs and investment in the United States.

Officials and industry sources say the three sides have been gradually narrowing their differences on autos.

However, several other major issues are still unresolved, including U.S. demands for a sunset clause that would allow NAFTA to expire if it is not renegotiated every five years, and elimination of settlement panels for trade disputes.

— Reporting for Reuters by David Ljunggren and Anthony Esposito; additional reporting by David Shephardson in Washington and Daina Beth Solomon in Mexico City.

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Ryan, who controls legislation in the House of Representatives, set his deadline in remarks delivered on Wednesday to the Ripon Society in Washington and publicized on Thursday.

Under the “fast track” trade negotiating law, there are lengthy notification periods before U.S. President Donald Trump could sign a new North American Free Trade Agreement and before Congress could begin considering it.

Letting negotiations drag on much longer would punt consideration to a new Congress elected in November that will take office in January 2018, one that could cede more control to Democrats.

“We have to have the paper — not just an agreement, we have to have the paper — from USTR by May 17 for us to vote on it this year, in December, in the lame duck” session, Ryan said.

A spokeswoman for Ryan said that he was referring to a notification of intent to sign the NAFTA agreement, not necessarily the full text.

Major differences remain between the three members of NAFTA after more than eight months of largely slow-moving negotiations launched at the insistence of President Trump, who wants major changes to the 1994 pact.

Friday indication

Mexico’s Economy Minister Ildefonso Guajardo said he expected to learn by the end of Friday whether a new deal was possible. He and his counterparts have been meeting in Washington since Monday to try to bridge major gaps.

“I think we will be finding out through the day and tomorrow… if we really have what it takes to be able to land these things in the short run,” Guajardo told Reuters.

A source close to the talks said it was possible that Guajardo, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland could extend their meetings into the weekend.

A USTR spokeswoman declined comment while a Freeland spokesman did not respond to a request for comment.

Guajardo told Reuters that “we have suitcases for two weeks if necessary.”

This week’s talks hit an obstacle as the U.S. and Mexico sought to settle differences over the key issue of automobiles.

“Mexico obviously is here in order to negotiate the best agreement for Mexican workers and consumers. It will take as long as it will take,” Mexican deputy economy minister Juan Carlos Baker told reporters late in the day.

But Ryan expressed skepticism that a deal could be reached in time and noted that several major issues remained unresolved, such as U.S. demands for more access to Canada’s dairy market and to make an investment dispute arbitration system optional.

“There are a handful of unresolved issues and I’m just not — I don’t want to make news, but we’ll see if they can get this done by May 17 and get us the paper to Congress, which then we could have this vote in December,” Ryan said. “If they can’t, then we won’t.”

Trump regularly threatens to walk away from NAFTA, underscoring uncertainty over the pact. Business executives complain that the lack of clarity is hitting investment.

Canada more upbeat

Freeland, however, struck a more optimistic tone. Speaking to reporters after meetings with U.S. legislators on Capitol Hill, she sidestepped questions as to when an agreement might be reached but said the three nations had made a lot of progress since Monday.

She is due to meet U.S. Secretary of State Mike Pompeo at 4:30 p.m. ET on Friday.

Mexico has launched a counterproposal to U.S. demands to toughen automotive industry content rules and boost wages. Trump blames cheaper wages in Mexico for manufacturing job losses in the U.S..

Many other major issues crucial to a deal are still unresolved, including U.S. demands for a five-year sunset clause, and elimination of settlement panels for trade disputes.

After meeting with Lighthizer on Thursday, Guajardo told reporters that the talks were not just covering autos.

“You cannot think that in a process of negotiations we’re going to solve one item without reviewing the overall balance of the agreement,” he said. “We’re going over all the items. It’s very important to stress that.”

— Reporting for Reuters by David Lawder and David Ljunggren.

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With time fast running out to reach a deal, the two NAFTA members are discussing a U.S. demand that a certain percentage of auto production happen in higher-wage areas of the region, a clear jab at lower-cost Mexico, said the sources, who requested anonymity given the sensitivity of the situation.

The two nations are also discussing a U.S. demand to boost the North American content of vehicles.

“Until that is settled one way or another, there is not much chance of broad progress,” said one of the sources.

The future of the North American auto industry in a renewed NAFTA is one of the toughest issues facing U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo.

Freeland met Lighthizer on Wednesday and deflected questions about the slow pace of the talks, saying Canada would take the time needed to get a good deal.

“We’ve been having productive conversations this week,” she told reporters.

Lighthizer says there are only weeks left to reach an agreement before negotiators start running into political challenges caused by a Mexican presidential election on July 1 and midterm elections in the U.S. in November.

“We are still engaged. We are trying to really make sure we can ensure progress,” Guajardo told reporters.

The three ministers, who together are in charge of the talks, have not all met together since convening in Washington on Monday and officials said they were not aware of any scheduled trilateral gatherings this week.

“We are meeting as we need to meet,” said Freeland.

Mexico has launched a counterproposal to U.S. demands to toughen automotive industry content rules and boost wages.

U.S. President Donald Trump, who blames NAFTA for job losses in the manufacturing sector, has frequently threatened to walk away from the 1994 pact unless major changes are made.

Many other major issues crucial to a deal are still unresolved, including U.S. demands for a five-year sunset clause, and elimination of settlement panels for trade disputes.

The chapter on intellectual property, seen by some as less problematic, is also far from resolved.

A biopharmaceuticals official said that the sector was pressing Lighthizer to insist on the 12-year period of patent and data exclusivity enshrined in U.S. law, while Canada was pushing for eight years.

— Reporting for Reuters by Anthony Esposito and David Ljunggren; additional reporting by Ana Isabel Martinez and Dave Graham in Mexico City; writing by David Ljunggren.

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Canadian Foreign Minister Chrystia Freeland, U.S. Trade Representative Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo are meeting in Washington in search of a deal on reworking NAFTA after talks began last August.

Hopes for a deal hinge substantially on the three countries’ ability to update rules for the automotive sector, the central plank of the Trump administration’s push to make changes to NAFTA that bring more jobs and investment to the U.S.

After a brief meeting with Lighthizer, Freeland told reporters she had held “good, constructive” talks with the U.S. team and that discussions focused on auto rules of origin.

“We are definitely making progress. I am not going to predict the day, hour and minute that we will be finished. We are certainly very, very hard at work, negotiators from all three sides,” she said.

Guajardo said the meeting was “productive,” noting that “we’re still trying to find ways to fix things and make proposals that we can all live with,” including on the thorny issue of rules of origin.

Guajardo added that “everything is still on the table,” as regards the auto industry aspect of the talks.

U.S. President Donald Trump initiated the talks to retool the 1990s-era trade agreement, threatening to dump NAFTA if it cannot be changed to his satisfaction.

Trump blames NAFTA for causing U.S. manufacturing jobs to be moved to Mexico. The pact’s supporters say the integration of North America has helped U.S. industry be more competitive.

Guajardo and Mexican Foreign Minister Luis Videgaray later met Lighthizer for talks, as did Jared Kushner, Trump’s son-in-law and presidential adviser. Some two hours later, Kushner described the meeting as “very productive,” while Videgaray said: “We’re making progress, but we’re not there yet.”

Earlier on Tuesday, Freeland said that Canada was looking for a “good deal, not just any deal,” on NAFTA and that her government would take the time required to reach that objective.

To do so, the three sides must narrow their differences on U.S. demands to overhaul rules for the auto sector.

Auto tussle

Mexico’s automotive industry has described the latest U.S. plan, which includes raising North American auto content to 75 per cent from the current 62.5 per cent over a period of four years for light vehicles, as “not acceptable.”

The U.S. proposal would also require that 40 per cent of the value of light passenger vehicles and 45 per cent for pickup trucks be built in areas with wages of $16 per hour or higher, which would create problems for lower-cost Mexico.

Mexico’s government has said it would put forward its own plan for the industry this week, and Jerry Dias, president of Canadian private sector union Unifor, told reporters he believed the discussions on the Mexican proposals had already begun.

Luis de la Calle, a former Mexican trade official, said the U.S. proposals were “backward-looking” and aimed at traditional carmaking. They did not reflect how the industry increasingly relied on high-tech electronics, he told Mexican radio.

Moreover, Trump’s ambition to push for a deal that favoured the U.S. but not Canada and Mexico was “grotesque and unacceptable”, he added.

High-level discussions over NAFTA have intensified since Lighthizer in early March floated the idea of agreeing a deal in principle in a matter of weeks. But there has been no clear sign of a conclusive breakthrough on the most contentious issues.

With a presidential election less than two months away in Mexico, time is running out to strike a quick deal.

Major differences remain between the three on several U.S. demands, including autos, the future of the pact’s dispute-resolution mechanisms and a U.S. proposal for a sunset clause that could automatically kill the deal after five years.

— Reporting for Reuters by Anthony Esposito; additional reporting by Frank Jack Daniel; writing by Dave Graham.

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With time fast running out to strike some kind of deal on the North American Free Trade Agreement, the three member nations are still far apart on major points.

Discussions in Washington will center on one particularly contentious area — the U.S. demand for tougher rules of origin governing what percentage of a car needs to be built in the NAFTA region to avoid tariffs.

“We are about to engage very seriously on what are the realities of the automotive sector of North America,” Mexican Economy Minister Ildefonso Guajardo told reporters before talks with U.S. Trade Representative Robert Lighthizer.

“It will be not just autos. There are a lot of other items that we have to review,” he said.

Other contentious chapters include the future of the pact’s dispute-resolution mechanism and a U.S. proposal for a sunset clause that could automatically kill the deal after five years.

Guajardo earlier told El Heraldo newspaper that if a deal could not be reached, “we would be operating what some analysts have called ‘Zombie NAFTA’ … (one) that isn’t dead and isn’t modernized.”

Business executives complain that uncertainty over the future of the 1994 agreement is hurting investment.

Sources close to the talks suggest there is a creeping feeling of uncertainty and pessimism going into the new round of negotiations because of gridlock on critical matters.

Lighthizer said last week that if the talks took too long, approval by the Republican-controlled U.S. Congress may be on “thin ice.” The aim is to complete a vote during the “lame-duck” period before a new Congress is seated after November’s congressional elections.

Mexico holds its presidential election on July 1 and the front-runner, leftist Andres Manuel Lopez Obrador, says he wants a hand in redrafting NAFTA if he wins.

At the heart of the NAFTA revamp is U.S. President Donald Trump’s desire to retool rules for the automotive sector in order to try to bring jobs and investment back north from lower-cost Mexico.

Mexico’s main auto sector lobby has described the latest U.S. demands, which include raising the North American content to 75 per cent from the current 62.5 per cent over a period of four years for light vehicles, as “not acceptable.”

Bureaucratic nightmare

The U.S. proposal also would require that 40 per cent of the value of light-duty passenger vehicles and 45 per cent for pickup trucks be built in areas with wages of $16 per hour or higher (all figures US$).

That could be a challenge for Mexico, where the Ann Arbor, Michigan-based Center for Automotive Research has estimated auto assembly workers on average earn under $6 an hour, and workers at auto parts plants on average earn less than $3 an hour.

Critics also say it would create a bureaucratic nightmare of paperwork.

Talks to renegotiate NAFTA started last August to fulfill a campaign pledge by Trump to bring manufacturing jobs back to the U.S.

Nine months later, the most troublesome issues remain open. The U.S. has stuck with a proposed sunset clause for the new deal, which would mean the agreement would need to be renewed every five years, a move that critics say would create huge uncertainty for businesses.

Another contentious U.S. proposal is to repatriate dispute resolution to the domestic legal system from international tribunals. Both Canada and Mexico oppose that measure, and so does U.S. business.

Asked if an agreement were possible this week, a Mexican source close to the talks said: “The possibility is there, but it will depend on whether the United States is flexible.”

Trump has frequently said he would pull out of NAFTA if a better deal was not possible, although he has sounded more positive about the deal in recent weeks.

It is unclear where the U.S. might give ground to win a quick deal. The Trump administration has embraced confrontational policies in its dealings on trade.

— Reporting for Reuters by Veronica Gomez and Anthony Esposito; additional reporting by Ana Isabel Martinez, Frank Jack Daniel and Sharay Angulo in Mexico City, David Lawder in Washington and David Ljunggren in Ottawa; writing by Anthony Esposito.

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The trade teams began a seventh round of talks on Sunday aiming to finish reworking less contentious chapters of the North American Free Trade Agreement in order to create space to broker agreement on the trickiest subjects.

Still, with a presidential election looming in Mexico in July and U.S. mid-term congressional elections in November, the talks increasingly run the risk of getting entangled in domestic political considerations.

Negotiators are confident that the lesser hurdles will gradually be cleared. But the discussions have again been clouded by the proposed wall along the U.S. southern border that Trump has long touted as a necessity to curb illegal immigration and that he says Mexico must pay for.

Mexico has consistently rejected paying for the wall, and its government had hoped to arrange a meeting between President Enrique Pena Nieto and Trump in the next few weeks. However, a senior U.S. official said at the weekend that plan had been postponed after a phone call between the two soured over the wall earlier this month.

The trade negotiators have become used to such distractions, but the talks are increasingly centering on U.S. demands that officials say can be resolved only at the top political level.

Mexico’s government has not commented officially on the derailment of the planned meeting, but Juan Pablo Castanon, head of the powerful CCE business lobby, was less reticent as he took stock of the unfolding NAFTA negotiations in Mexico City.

“Obviously, the cancellation of the Mexican president’s trip to the United States is an important element in the negotiations: it’s politics that can help us resolve the technical issues we’re moving forward on,” Castanon said.

The NAFTA talks were launched last year after Trump said the 1994 agreement should be overhauled to better favor U.S. interests or Washington would quit the accord.

One former Mexican official still familiar with the process said the government was concerned that the fallout from the Trump-Pena Nieto phone call could weigh on the atmosphere at the talks, in spite of hopes that several chapters may be finished.

Castanon of the CCE said measures on e-commerce, telecommunications and sanitary standards for agricultural products were almost completed, and others close to the talks believe the energy chapter could also conclude.

Officials do not anticipate major breakthroughs on the most intractable proposals during the latest round of talks in Mexico City, which are due to run until March 5.

U.S. demands range from changes to automotive content origin rules and dispute resolution mechanisms, to imposing a clause that could automatically kill NAFTA after five years.

Agriculture, rules of origin, labour and regulatory practices were among the issues due to be discussed on Monday, one day before chief negotiators return to the fray.

Auto components

The Trump administration wants NAFTA rules of origin changed to make automakers source more parts from the region and specifically the U.S., a major sticking point that the industry itself opposes.

The government is concerned that a lack of progress on the issue could hurt the renegotiation, the former official said.

In a sign of movement, the U.S. official leading the auto content negotiations was called back to Washington from Mexico for consultations on Monday, U.S. and Mexican officials said.

One official said the negotiator went back to talk to U.S. automakers and U.S. Trade Representative Robert Lighthizer.

Seeking to break the deadlock, the Mexican government has said it would put forward a proposal on rules of origin at this round, but a Mexican official said on Monday no new ideas had been presented so far.

There was little sign of compromise on other thorny issues early on, with a senior Canadian agriculture official pushing back against U.S. demands to dismantle Canadian protections for the dairy and poultry sectors known as supply management.

“When it comes to supply management, we believe there can be no concession,” said Jeff Leal, Ontario’s minister of agriculture, food and rural affairs.

— Reporting for Reuters by Anthony Esposito and Sharay Angulo; additional reporting by Dave Graham.

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Trump, who described the 1994 pact as a disaster that has drained manufacturing jobs to Mexico, has frequently threatened abandon it unless it can be renegotiated to bring back jobs to the U.S.

U.S. Trade Representative Robert Lighthizer said after a sixth round of NAFTA modernization talks in Montreal that Trump’s views on the pact are unchanged, and cautioned that talks are still moving too slowly on U.S. priorities.

“We finally began to discuss the core issues, so this round was a step forward,” Lighthizer said. “But we are progressing very slowly. We owe it to our citizens, who are operating in a state of uncertainty, to move much faster.”

But Lighthizer’s Mexican and Canadian counterparts said that enough progress was made in Montreal to be optimistic about concluding the pact “soon,” with nine days of talks in Mexico City scheduled to start Feb. 26.

“For the next round, we will still have substantial challenges to overcome. Yet the progress made so far puts us on the right track to create landing zones to conclude the negotiation soon,” said Mexico’s Economy Minister Ildefonso Guajardo.

Officials are now openly speculating that the bid to salvage the US$1.2 trillion free trade pact will continue well beyond an end-March deadline set to avoid Mexican presidential elections.

Canadian proposals dismissed

Heading into Montreal last week, some officials had feared the U.S. might be prepared to pull the plug on the pact amid frustration over slow progress.

The mood lightened after Canada presented a series of suggested compromises to address U.S. demands for reform.

But Lighthizer criticized Canadian proposals to meet U.S. demands for higher North American content in autos, saying it would in fact reduce regional autos jobs and allow more Chinese-made parts into vehicles made in the region.

He also dismissed a suggestion on settling disputes between investors and member states as “unacceptable” and “a poison pill” and said a recent Canadian challenge against U.S. trade practices at the World Trade Organization “constitutes a massive attack on all of our trade laws.”

Canadian Foreign Minister Chrystia Freeland, who stood stony faced as Lighthizer made his remarks, later told reporters that “the negotiating process is… always dramatic.”

A Canadian government source, speaking on the condition of anonymity, noted Lighthizer had not speculated about withdrawal and said the U.S. official had been more positive in private than during previous rounds.

Officials said the negotiating teams had closed a chapter on anti-corruption measures and were close to wrapping up sections on telecommunications, sanitary measures for the agriculture industry and technical barriers to trade.

But the three sides are still far apart over U.S. demands to boost regional auto content requirements to 85 percent from the current 62.5 per cent and require 50 per cent U.S. content in North American-built vehicles.

Other challenges are Washington’s demands that NAFTA largely eliminate trade and investment dispute-settlement systems and contain a “sunset” clause to force renegotiations every five years.

Critical comments by Trump, Lighthizer and others have unsettled markets that fret about the potential damage to a highly integrated North American economy if the U.S. gives six months’ notice it is leaving.

The Mexican round next month is an extra set of talks that officials added to help tackle the many remaining challenges. Negotiators are supposed to finish in Washington in March with the eighth and final round.

Although some officials have privately speculated about freezing the talks at the start of April, Guajardo told reporters that “we cannot afford to suspend this process.”

— Reporting for Reuters by David Lawder and Anthony Esposito; writing by David Ljunggren; additional reporting by Allison Lampert and David Ljunggren in Montreal.

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A U.S. tribunal unexpectedly dismissed a complaint by Boeing against alleged dumping by Bombardier in the case of 75 jets it sold to Delta. The ruling allows the Canadian firm to pursue other orders in the lucrative U.S. market.

“Canada-United States trade is important to the prosperity of both our countries. This decision will support well-paying middle-class jobs on both sides of the border,” Canadian Foreign Minister Chrystia Freeland said in a statement.

The U.S., which has taken a more isolationist stance under President Donald Trump, wants big changes to the trilateral North American Free Trade Agreement.

Jerry Dias, the head of a union which represents some Bombardier workers, told reporters the ruling represented “a slap across the face of the Trump administration” because it showed that taking protectionist stances at a time when the two nations’ economies are so tightly linked was “foolish.”

He spoke in Montreal, where teams from the U.S., Canada and Mexico have gathered for the sixth of seven planned rounds on how to revamp the 1994 pact.

Progress is slow, prompting Mexico to suggest the talks could be extended to give officials more time to address disagreements threatening to undermine the US$1.2 trillion treaty.

Dias, who speaks regularly to chief Canadian negotiator Steve Verheul, said the talks were going nowhere, thanks to a series of contentious U.S. proposals.

As the negotiations grind on, officials are looking at an extra round in Mexico at the end of February, according to sources close to the process.

‘Window of opportunity’

Although the process was initially scheduled to finish by the end of March to avoid clashing with Mexican presidential elections in July, Economy Minister Ildefonso Guajardo said the timeline could be extended.

“This negotiation has a window of opportunity to reach a deal between February and the end of July,” he told Reuters.

Canada, which this week presented a series of suggestions on how to unfreeze the talks, quickly welcomed the idea.

A Mexican source briefed on the talks said once the election campaign has started, negotiators could still continue their work but without holding formal rounds.

Mexican deputy economy minister Juan Carlos Baker hit back at the idea that progress was slow.

“I would dispute the notion that talks are not moving forward, or have not progressed, or are in any way, shape or form swamped,” said Baker, adding that he was “optimistic” that the results from the round would please ministers from the three nations when they meet on Monday to review the week’s work.

The three nations are now looking at an extra week of talks in Mexico, possibly starting Feb. 26, ahead of the last round in Washington at the end of March, said the sources.

Whether more talks can help forge an agreement is unclear, given the gulf between the U.S. and its two partners.

The Trump administration, which blames NAFTA for hurting U.S. manufacturing, wants the North American content of autos to be raised.

Canada responded by suggesting that content would be higher if the value of software and other high-tech materials made by the three nations were taken into account.

An auto industry source said U.S. and Mexican negotiators found the idea interesting but gave no details. Canadian chief negotiator Steve Verheul said on Thursday “there is a lot more thinking” to do about the idea.

— Reporting for Reuters by David Ljunggren and Anthony Esposito in Montreal; additional reporting by Dave Graham in Mexico City.

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