U.S. President Donald Trump is threatening to quit NAFTA, which has reshaped the continent’s auto sector over the past 23 years, unless major changes can be made to return manufacturing jobs to the United States.

Canadian and Mexican negotiators will address the U.S. auto demands on Tuesday, the final day of the fifth round of talks to update the North American Free Trade Agreement, chief Mexican negotiator Ken Smith told reporters.

Although the talks are due to wrap up in March 2018 after a seventh and final round, they are deadlocked over a series of hard-line proposals the U.S. unveiled at the fourth round last month.

“It’s definitely slowed down from the previous round,” said a Canadian source with direct knowledge of the talks. “There has been no progress in the contentious chapters.”

Canadian and Mexican officials have complained repeatedly about what they see as U.S. inflexibility. A spokeswoman for the U.S. Trade Representative declined to comment.

Negotiators say they need to finish their work before campaigning for Mexico’s presidential election formally begins at the end of March.

The campaign team for the leftist former mayor of Mexico City and early front-runner, Andres Manuel Lopez Obrador, on Monday repeated calls for the NAFTA talks to be postponed until after the July presidential vote.

The Canadian source said the sixth round would be held in Montreal at the end of January 2018.

Mexico and Canada fear Trump will follow through on a promise to pull out of NAFTA, causing disruption and economic damage. The Canadian dollar edged lower against its U.S. counterpart on Monday, in part because of concerns about the negotiations.

Alarmed U.S. politicians and industry groups have started to put concerted pressure on the White House not to take drastic moves they say would cause job losses.

“Support for NAFTA from the American private sector, and also members of Congress, and even Republican governors, is starting to get very vocal, which we view very positively,” said Moises Kalach, head of the international negotiating arm of Mexico’s CCE business lobby.

Jeff Leal, minister of agriculture for the powerful Canadian province of Ontario, said in an interview he believed the increasingly vocal U.S. protests would help those who wanted to keep NAFTA.

Friction over auto content standards

Canada and Mexico are particularly unhappy about the U.S. push for tougher autos content. Vehicles and auto parts account for most of the US$64 billion U.S. trade deficit with Mexico, a sore spot for Trump.

The Trump administration wants half of the content of all North American-built autos be produced in the U.S. and the regional vehicle content requirement to be increased to 85 per cent from 62.5 per cent.

Canada and Mexico dismiss the idea as unworkable and plan to respond with presentations on how such a move would damage the North American auto industry, people briefed on the talks said.

A Mexican auto industry representative with knowledge of the talks called the U.S. proposal “insane” on Sunday.

“There is no product made in North America that meets this rule of origin requirement,” said Matt Blunt, president of the American Automotive Policy Council, which represents Ford, General Motors and Fiat Chrysler .

In San Antonio, Texas, a senior U.S. official told a Senate panel that the administration wanted to rebalance the large automotive trade deficit with Mexico.

— Reporting for Reuters by Sharay Angulo and Ana Isabel Martinez; additional reporting by David Ljunggren, David Lawder, Dave Graham and Anthony Esposito in Mexico City and Fergal Smith in Toronto; writing by David Lawder and David Ljunggren.

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Australian Trade Minister Andrew Robb said ministers from the 12 countries negotiating the Trans-Pacific Partnership (TPP) detailed outstanding issues at a meeting in Atlanta and pledged to try to close the deal this week.

“All the participants were genuine about coming here to conclude,” he told Reuters after the plenary session on the TPP, which would cut trade barriers and set common standards for 40 per cent of the world economy.

“There’s an intent there. We are now swapping different versions of possible outcomes, but we have got a lot to do,” he said.

Japanese Economy Minister Akira Amari was quoted by Japanese media as saying, “We have to head into this with the expectation that we can wrap things up.”

Japan, the second largest economy in the TPP bloc after the U.S., is under pressure to open its agricultural sector to more imports and wants to secure a good deal for its automakers.

Australia is keen to export more of its sugar and dairy, and wary of a push by the U.S. to set patent periods for medicines that would extend beyond the current five years currently mandated by Canberra.

Monopoly periods for next-generation biologics drugs are one of the thorniest issues left for ministers to debate, along with local content rules on autos traded between Mexico, Canada, the U.S. and Japan.

“The landing zones are very complicated, but we are weighing all the alternatives to achieve a deal,” a source close to the negotiations said.

The source played down the chance of closing the deal with only some partners, one option that was being discussed on the sidelines of the talks in Atlanta.

New Zealand Prime Minister John Key said he sees a good chance of wrapping up a Pacific trade deal this week, but he said the pact could be scuppered if negotiations were to drag on.

Speaking at the Asia Society in New York City, Key said New Zealand, home to the world’s largest dairy exporter Fonterra, was still not happy with dairy market access but agreement was closer on other issues, including intellectual property.

With presidential elections in the U.S. set for November 2016 and some opposition in Congress to the deal, time is of the essence to complete the agreement, which could be a legacy-defining achievement for U.S. President Barack Obama.

“The window of opportunity to complete TPP is closing so you wouldn’t say it’s impossible to complete the deal if it doesn’t take place in Atlanta, but it does become more difficult,” Key said.

TPP leaders are scheduled to meet at an Asia-Pacific Economic Co-operation summit in the Philippines in mid-November, which Key said was “probably the last opportunity for 2015” to close the trade deal, already more than five years in the making.

— Ana Isabel Martinez and Krista Hughes are Reuters correspondents based in Mexico City and Washington, D.C. respectively. Additional reporting for Reuters by David Brunnstrom in New York and Kevin Krolicki in Atlanta.

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Trade ministers from the 12 Trans-Pacific Partnership (TPP) countries said after May meetings in Singapore the talks gained momentum and they would step up efforts over coming weeks.

A central element of U.S. President Barack Obama’s strategic shift towards Asia, the TPP would cut trade barriers and harmonize rules in a complex deal covering two-fifths of the world economy and a third of global trade.

Some officials close to the talks told Reuters they worried about a closing window of opportunity to finalize talks with U.S. mid-term elections in November.

A Mexican official, who was not authorized to speak publicly, said some were pushing to get an agreement in September at the latest.

“If we don’t make it during the summer it will be difficult for the United States to persuade voters in the middle of the mid-term election campaign, so the aim of the members, particularly Japan, the United States and Mexico, is to seek an agreement towards the end of the (northern) summer,” he said.

Still, others took a more pessimistic view. A diplomatic source from another TPP country, who is familiar with the negotiations but declined to be identified, said he did not expect ministers to meet again in July, or even August.

“Until the (U.S. mid-term) election is over, there won’t be real enthusiasm for striking a deal,” he said, adding it would need “huge political investment” in Washington to get an agreement this year.

“It is going to take considerable time to reach the final stage of negotiations. There is a lot of filibustering of issues by other countries because they are afraid if all issues are resolved, excluding those they are interested in, they will be crushed.”

Obama’s Democrats have links to labour and environmental groups who worry the TPP may cost the U.S. jobs and harm the environment. Some Democrats facing tight election races may be unwilling to support a deal that could lose them votes.

The White House hoped to complete TPP last year but talks stalled over Japanese tariffs on agricultural imports. Tokyo wants to protect rice, wheat, dairy, sugar and beef and pork products, while Washington seeks to shield U.S. carmakers from increased Japanese competition.

Countries hope to wrap up talks this year. Japanese Economics Minister Akira Amari has said talks are in their final phase. U.S. Trade Representative Michael Froman has said the substance will drive the timetable.

Those attending the Singapore talks said they noted a change in attitude from Japan after an earlier summit between Obama and Japanese Prime Minister Shinzo Abe.

“Japan is starting to sit down and talk with members like Mexico… Peru and Chile, whereas before they had been a bit evasive,” the Mexican official said.

Australian Trade Minister Andrew Robb said countries made real progress on what each would offer on market access. “My sense is that we are months, not years, away,” he said in written response to questions.

A New Zealand industry source briefed on the talks said it was unlikely that officials would reach anything other than a “cosmetic” agreement this year, with details to be worked out next year.

New Zealand has its own elections in September and the government will effectively be in hiatus from late June.

An individual familiar with the U.S. position said talks were not in the final phase yet and outstanding issues included the environment text, numerous intellectual property questions, rules on labour and the operation of state-owned enterprises.

— Ana Isabel Martinez reported for Reuters from Mexico City, Linda Sieg reported from Tokyo and Krista Hughes from Washington. Additional reporting for Reuters by Gyles Beckford in Wellington and Matt Siegel in Sydney.

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