US trade negotiators will only partially unveil new text on modifying a key chapter on investment under Nafta, two well-placed sources said on Sunday, underlying the cautious pace of talks that are supposed to wrap up by the end of the year.

The sources, with knowledge of the effort to modernise the trilateral North American Free Trade Agreement (Nafta), said the proposal on investment would not elaborate on possible changes being weighed by Washington under Chapter 11 of Nafta.

US officials, speaking on condition of anonymity, said the administration was still consulting with stakeholders, including business, on the issue.
Trade experts say the sluggish tempo of the talks mean it is doubtful whether Canada, Mexico and the United States - meeting in Ottawa for the third of seven planned rounds - can come to a deal by the end of December.

Chief Canadian negotiator Steve Verheul said he did not expect the US side to present detailed proposals in Ottawa on major issues such as dispute settlement, the dairy sector and tougher rules for North American content on autos.

"We're making good solid progress but the end game is always the hardest part and impossible to predict," he told reporters towards the end of the day.

US President Donald Trump, who frequently describes the 1994 treaty as a disaster, is threatening to walk away unless major changes are made.
Verheul told reporters the talks were constructive, although they had occasionally "become a little more heated". He said he had seen no sign so far that the US delegation might be preparing to leave the talks.

Nafta underpins more than $1 trillion in trade between the three countries a year, accounting for 39 per cent of Canada's GDP and 40 per cent of Mexico's, but just five per cent in the case of the United States, the world's largest economy.

Nafta's Chapter 11 allows an investor from a member country to sue a member government on the basis that it was not treated fairly.

While corporations want the administration to keep Chapter 11 - the investor state dispute settlement - in Nafta, some US lawmakers argue that it infringes on sovereignty by allowing foreign investors to sue the US government over laws that are valid.

Canada is proposing a similar arrangement to the one it has in its free trade deal with the European Union, a senior Canadian source said. Canada and the EU have agreed to set up a permanent investment court to settle disputes. - Reuters

Source: Khaleej Times