Up until a few weeks ago, Lighthizer thought Mexico faced the biggest time pressure to wrap up the talks before its July 1 presidential elections, a Mexican source close to the talks told Reuters.
In early May, however, Mexican Economy Minister Ildefonso Guajardo told Lighthizer in Washington that he would be able to negotiate a NAFTA agreement up until the Dec. 1 transition to a new government — even if an opposition candidate won.
Suddenly, it was the United States running against the looming congressional deadline, the Mexican source said.
The Trump administration's negotiating goals submitted to Congress in July 2017 talked of shrinking trade deficits with Mexico and Canada and boosting U.S. auto production.
In contrast, the U.S. neighbors saw the talks more as a "modernization" exercise, proposing, for example, chapters on digital trade that did not exist when NAFTA took effect in 1994.
Broadly, both were fine with the status quo, so when it took Washington two months to present specific demands the delay played into their hands.
"How can you launch talks to update a treaty and then make everyone wait months before you explain what you want," asked one Canadian official briefed on the talks.
Lighthizer's office said he was clear all along about aiming to "rebalance" NAFTA trade in U.S. favor.
"The United States has been very clear and specific from the start about what we hope to see in a new NAFTA and has worked at an unprecedented pace to negotiate a better deal for America," the office's spokesman said.
When Lighthizer's team presented the demands in October, Canadian and Mexican officials said they amounted to surrendering decades of trade benefits, which they could not accept.
U.S. business groups labeled those demands "poison pills" that threatened to derail the talks and prompt Trump to quit the pact. The key ones were: a steep increase in regional automotive content requirements, a demand for half the value of North American vehicles to originate in the United States and a requirement to renegotiate the pact every five years.
All remain unresolved, despite nearly eight weeks of marathon negotiations in Washington in April and May, focused mainly on autos.
Canada and Mexico had their role in running down the clock. It has taken Ottawa and Mexico three months to produce counterproposals, drawing criticism from Lighthizer they were failing to "engage."
Canadian and Mexican negotiators argued they needed time to understand the logic of U.S. demands because they came without customary backup evidence and analysis. U.S. negotiators said it was the consequence of the extremely tight timetable.
But U.S. chief negotiator John Melle privately complained to U.S. colleagues that Ottawa was deliberately wasting time on less essential matters, such as proposed new chapters on women's and indigenous people's rights, a U.S. source close to the talks said. Canadian officials deny trying to drag out negotiations.
Speaking at a business event early this year, Canada's veteran chief negotiator, Steve Verheul, described the talks as the "most unusual negotiation" he had ever been involved in, because of Washington's winner-takes-all approach.
"They are looking to strengthen the U.S. and by doing that weaken Canada and Mexico."