Time crunch looms over seventh round of NAFTA talks

NAFTA negotiators are hoping to pick up where they left off in Montreal in January and make more progress behind the scenes in Mexico City this week.

But if that progress is going to be meaningful, observerswarn thetalks are going to need to move faster than they have in the past.

The political calendar is hanging over this round of discussions; campaigning for the Mexican federal election is set to begin in late March.

If a deal is not reached by then, it will add another layer of uncertainty to the renegotiation process and could further slow the talks.

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"It is time for the political leadership to decide whether to get to a deal or not," said former U.S. diplomat Scotty Greenwood.

"If you could make a ton of progress this round, so you could announce something immediately thereafter, that would be good. Short of that, I think you then adopt a go-slow approach, and you just negotiate for a long time and avoid not just the Mexican election, but the U.S. midterms later this year, and then the Canadian elections next year."

There is no firm timeline for a deal to be reached, but this added pressure hangs over the seventh round of talks now underway in Mexico City.

Optimism over obstacles

Negotiators from Canada, the U.S. and Mexico will sit down and discuss the trade deal over the next 10 days, with the political leaders overseeing the negotiating process meeting on March 5.

Plans are in the works to schedule an eighth round of talks in the U.S. in late March.

Earlier this month, Canada's ambassador to the United States seemed to suggest a deal in principle could be possible before the Mexican election campaign.

"Iam pressing our government,the Mexicansand the U.S. negotiators as hard as Ican and encouraging everyone to see if we can't work over the next two months to get some resolution," David MacNaughton said during a roundtable discussion in Ottawa on Feb. 5.

"Ithink the time of rhetoric is probably past us that we should roll up our sleeves ... put the uncertainty behind us and get on with building the most competitive relationship in the world."

A source with direct knowledge of the talks told CBCNews that officials are focusing squarely on this round of talks, and that there is a sense of optimism progress will continue.

'Creative solutions'

During the talks in Montreal, Canada presented what it called "creative solutions" to some of the biggest stumbling blocks, including the auto sector, a proposed sunset clauseand the dispute resolution process.

The move appeared to satisfy some American critics, who had accused Canada of not engaging on the big U.S. proposals.

But the source acknowledged there is still a long way to go on those big issues, particularly the auto sector.

That topic will be discussed this week at the chief negotiator level.

Even if progress is made, Greenwood warns that only so much of this process is up to the negotiators themselves.

"You also have a president of the United States who is enormously unpredictable ... he could throw a monkey wrench at any time."