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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More than 20 provisions have been suspended or changed in the final text ahead of the deal’s official signing in March, including rules around intellectual property originally included at the behest of Washington.

The original 12-member deal was thrown into limbo early last year when U.S. President Donald Trump withdrew from the agreement to prioritize protecting U.S. jobs.

The 11 remaining nations, led by Japan, finalized a revised trade pact in January, called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It is expected to be signed in Chile on March 8.

The deal will reduce tariffs in economies that together amount to more than 13 per cent of the global GDP — a total of US$10 trillion. With the U.S., it would have represented 40 per cent.

“The big changes with TPP 11 are the suspension of a whole lot of the provisions of the agreement. They have suspended many of the controversial ones, particularly around pharmaceuticals,” said Kimberlee Weatherall, professor of law at the University of Sydney.

Many of these changes had been inserted into the original TPP 12 at the demand of U.S. negotiators, such as rules ramping up intellectual property protection of pharmaceuticals, which some governments and activists worried would raise the costs of medicine.

The success of the deal has been touted by officials in Japan and other member countries as an antidote to counter growing U.S. protectionism, and with the hope that Washington would eventually sign back up.

“CPTPP has become more important because of the growing threats to the effective operation of the World Trade Organization rules,” New Zealand Trade Minister David Parker said on Wednesday.

Last month, Trump told the World Economic Forum in Switzerland that it was possible Washington might return to the pact if it got a better deal.

However, Parker said on Wednesday that the prospect of the U.S. joining in the next couple of years was “very unlikely” and that even if Washington expressed a willingness to join CPTPP, there was no guarantee that the members would lift all the suspensions.

Parker said the deal would likely come into force at the end of 2018 or the first half of 2019.

Governments were quick to tout the economic benefits of the agreement.

“The TPP-11 will help create new Australian jobs across all sectors — agriculture, manufacturing, mining, services — as it creates new opportunities in a free trade area that spans the Americas and Asia,” said Steven Ciobo, Australia’s minister for trade in an emailed statement.

New Zealand’s government expected the CPTPP to boost the island nation’s economy by between NZ$1.2 billion (C$1.11 billion) and NZ$4 billion a year, with beef and kiwifruit exporters among the top beneficiaries of the deal.

Brian Innes, president of the Canadian Agri-Food Trade Alliance, representing export commodity groups, said CAFTA is “especially pleased that the market access provisions in the original agreement remain intact.”

Gaining preferential access to Japan is “especially important,” he said in a release Wednesday, “since it is the third-largest market for Canadian agriculture and agri-food products, accounting for $4 billion in exports in 2016.”

Taking part in the CPTPP will give Canada a competitive advantage over the U.S. in several markets, CAFTA said, and will also level the playing field for Canadian exports to other CPTPP countries, such as Australia, which already have trade pacts with Japan.

The pact’s 11 member countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

— Reporting for Reuters by Charlotte Greenfield in Wellington and Colin Packham in Sydney. Includes files from AGCanada.com Network staff.

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Ministers from the 12 nations negotiating the Trans-Pacific Partnership (TPP), which would stretch from Japan to Chile, fell short of a deal at talks last month on the Hawaiian island of Maui, despite early optimism.

Japan’s Economy Minister Akira Amari, in a blog circulated Tuesday, also questioned why the U.S. appeared to have lacked its usual “stubborn persistence” at those talks, despite a willingness of some countries to stay to try to reach an agreement.

“The reason I stressed… that we should meet again this month was because each country might lose interest and (the talks) would go adrift,” Amari wrote.

“If they lose interest, it would take considerable time and effort to get motivation back to the original level, because the key to success is whether each country can maintain momentum towards an agreement.”

Amari said the U.S. was vague about a concrete time frame and it appeared its negotiators needed a break.

Amari reiterated a dispute over intellectual property protection for data used to develop biologic drugs, which Washington insists should be 12 years, and gaps over access to member countries’ dairy markets — a key issue for New Zealand — were major sticking points.

“What every country thought was strange was that the U.S. did not show its usual stubborn persistence this time but simply gave up,” he wrote, adding that the U.S. negotiators seemed to have judged that agreement could not be reached in a day or two.

Failure to clinch a deal was a setback for U.S. President Barack Obama’s pivot to Asia and efforts to counter China’s clout. Japanese Prime Minister Shinzo Abe has also cast the deal as crucial to his efforts to reboot Japan’s stale economy.

— Reporting for Reuters by Kaori Kaneko in Tokyo.

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Canada’s representatives to the World Trade Organization, on Friday in Geneva, deposited the government’s “instrument of ratification” for the 1991 Act of the International Union for the Protection of New Varieties of Plants (UPOV ’91).

Agriculture Minister Gerry Ritz said Monday the move finalizes one of the main measures of the government’s Agricultural Growth Act, which was passed this spring and brought Canada’s plant breeding legislation in line with the UPOV ’91 Convention.

“With the ratification of UPOV ’91, plant breeders have more protection and farmers have better access to a wider variety of seeds,” the government said in a release Monday.

The treaty, the government said, “encourages increased investment in plant breeding and brings Canada in line with trading partners, allowing Canadian farmers to be more competitive in the global marketplace.”

“We have been operating under the UPOV ’91 Convention since February, but now it has been announced to the world,” Canadian Seed Trade Association president Dave Baute said in a separate release.

“After 22 years of hard work, Canada’s formal ratification of the 1991 UPOV Convention places the agricultural sector solidly on the world stage and confirms that the door is open for international and domestic collaboration and innovation.”

Since the Act was passed in late February, the CSTA and other crop commodity groups said Monday, “new varieties of wheat, oats, flax, and potatoes, that would never have come to Canada without the updates to Canada’s Plant Breeders’ Rights (PBR) legislation, have become available.”

PBR is federally-mandated intellectual property protection for plant breeders who develop new plant varieties and want to sell and collect royalties from the sale of seed or plant genetics.

Canada, the government said Monday, has already seen a 20 per cent increase in the number of PBR applications since the Agricultural Growth Act came into force this year.

Formal UPOV ’91 ratification, the groups said, “confirms to the world that Canada supports an agricultural sector that is sustainable and competitive and that investment is welcome domestically and internationally.”

“Stronger intellectual property rights have proven to provide greater incentives to increase investment in research and development for Canada’s crop sector, giving our farmers greater access to the newest crop varieties,” Ritz said.

Critics of UPOV ’91 such as Canada’s National Farmers Union have said the treaty will make it “much more difficult” for farmers to save and reuse seed, forces them to pay more for seed and consolidates control over seed with the “world’s largest agribusiness corporations.”

Bringing PBR in line with UPOV ’91, the government said, doesn’t change what farmers are allowed to do with respect to protected plant varieties, but is meant to “facilitate a breeder’s ability to enforce his/her rights on protected plant varieties.”

The government has also said Canada’s UPOV-based PBR legislation enshrines the “farmers’ privilege,” allowing farmers to save, clean, treat and store seed produced from a protected plant variety and use it for replanting on their own farms.

“If farmers are obtaining seed of a protected variety legitimately, then there will be no increased liability.” — AGCanada.com Network

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