U.S. shaves NAFTA auto demands

In a pair of dramatic moves, the Trump administration has signalled a growing desire to secure new trade deals, softening one key demand in the NAFTA negotiations, then expressing an interest in re-joining the Trans-Pacific Partnership.

The twin developments are a departure from the combative posture that had stoked U.S. tensions with Canada, Mexico, the European Union, Japan and even with its own struggling farmers, straining under threats of cancelled deals, tariffs, and tit-for-tat trade wars.

The development most immediately affecting Canada transpired at the NAFTA negotiating table where, sources say, the U.S. has shaved 10 percentage points off its demand on automobile content.

After spending months demanding a big increase in the amount of content cars must include from North America to avoid a tariff, in addition to insisting that half of every car comprise U.S. parts, it has now softened both proposals.

It recently dropped the American-made requirement, and then came news Thursday that it agreed to a more modest change on the North American requirement, with its demand for 85 per cent North American parts scaled down to 75 per cent, in addition to helping automakers meet the new threshold by offering credits for spending on worker salaries and research.

“We’re getting pretty close to a deal (on NAFTA),” Trump said at the White House.

“It could be two weeks, it could be three months, it could be five months, I don’t care ... I have no timeline ... I keep reading from the fake news media that we’re pushing it, we’re not pushing it .... There’s no timeline.”

That suggests the deadline threat of steel and aluminum tariffs against Canada and Mexico without a deal by May 1 may be off the table.

But that wasn’t the biggest bombshell the White House dropped Thursday.

The more far-reaching, long-term story involves news that Trump wants to explore rejoining the Trans-Pacific Partnership. That deal was originally viewed as a geopolitical tool, with expanded American commercial links in China’s backyard, and new trade standards for the Chinese to adhere to in any eventual free-trade deal.

Trump railed against the deal as a candidate, then pulled out upon entering office.