U.S. autos content demands loom as obstacle in NAFTA talks
NAFTA negotiators discussed rules of origin on Monday (September 04) as the Trump administration’s expected demand for U.S.-specific automotive content requirements was emerging as a major obstacle to a deal, industry lobbyists reported.
This demand may prove a bigger problem than potentially increasing the overall North American automotive value content from the current level of 62.5 percent for tariff-free shipments of vehicles within the region, which officials say Trump’s administration also wants to raise. Autos are expected to be one of the most contentious parts of the talks because the sector accounts for the lion’s share of the U.S. trade deficit with Mexico.
Juan Pablo Castanon, head of Mexico’s powerful CCE business lobby, which is representing the private sector, told reporters the automotive and labour issues were among the areas least advanced in the negotiations so far.
The talks so far have largely focused on the three countries proposing their preferred language for less controversial areas, such as digital and cross-border services trade, according to government officials and industry representatives briefed. But negotiators have not started consolidating the language, and wording for more controversial subjects, including rules of origin and dispute resolution mechanisms, is not expected to be revealed until the next round later this month in Canada.