Canada to deliver lecture on autos at NAFTA talks

MEXICO CITY — Canadian negotiators intend to provide a briefing to their American peers on how their auto proposals would devastate their own domestic industry, in an effort to reset one of the most difficult conversations looming over the renegotiation of NAFTA.

Multiple sources say that at the current round Canada will not deliver a counterproposal — but a presentation. They expect Mexico will also delay a counter-offer on auto parts, amid hope the U.S. might revise its own position.

They say the countries are making progress at the current round in Mexico City on less-controversial files while saving the thornier ones for later in the negotiations, with auto parts decidedly parked in that difficult category.

The U.S. proposal at the last round drew a backlash from Canada, Mexico, the auto industry and from dozens of American lawmakers who released a public letter blasting it.

The American proposal had four main components: insisting half of a car’s parts be from the U.S. to avoid a tariff, drastically increasing the amount of content required from North America overall, toughening the method for calculating the parts percentages, and insisting that companies implement all those changes within a year.

Some auto-parts representatives say that package is so unrealistic it would prompt companies to move production out of North America, build in Asia and just pay the import tariff, which starts at 2.5 per cent for cars entering the U.S.

The Canadian side will lay all that out in an exhaustive presentation today.