US did not detail request for auto rules of origin at NAFTA
WASHINGTON: In the opening North American Free Trade Agreement ( NAFTA) session of talks, the US did not give precise details of how much it wanted to boost North American content for autos, a source directly familiar with the negotiations said.
Robert Lighthizer, President Donald Trump’s top trade adviser, this week said Washington wanted tougher rules of origin for autos, which determine how much of a vehicle must be built in the three NAFTA nations.
He also said the US was seeking new measures to ensure “substantial US content” for autos.
Companies wishing to take advantage of free trade in goods guaranteed by NAFTA must currently meet the 62.5 per cent North American content requirement for autos and 60 per cent for components.
But during the opening fourhour round of talks on rules of origin on Friday, the US delegation did not give details of how much it wanted the requirements to be lifted by.
It also did not give a specific figure for what substantial US content for autos could mean, said the source, who asked not to be identified because of the sensitivity of the matter.
US officials said they could not confirm the source’s account.
Agreement on a revised NAFTA agreement could pivot on the autos sector given its weight in trade.
The US had autos and auto parts trade deficits of US$ 74 billion with Mexico and US$ 5.6 billion with Canada last year, both major components of overall US goods trade deficits with its North American neighbours.
The US, Canada and Mexico on Wednesday opened talks in Washington to modernise the NAFTA, which was signed in 1994. Trump has denounced NAFTA as a “disaster” that encouraged firms to shift production to Mexico.
Administration officials say strengthening the rules of origin for autos will help boost well-paid jobs in the US as well as cut the trade deficit with Mexico, another key Trump goal. — Reuters