U. S. negotiators squeezed on two sides during NAFTA talks

Key demands blasted at home and abroad

MEXICO CITY• The United States negotiating team found itself squeezed at home and abroad during NAFTA talks on Monday, with various actors from Canada, Mex- ico and within the U.S. blasting its key demands on auto policy as unworkable and unworthy of serious bargaining.

The Canadian and Mexican governments have refused to produce a counterproposal at the current round of talks and instead are delivering a presentation on the self- inflicted damage they claim the auto policy would wreak upon America.

Their case was bolstered by a hearing before the U. S. Senate, which heard a major auto association warn that the current proposal could induce companies to leave this continent and simply pay import tariffs.

The U. S. stunned its partners by demanding car companies quickly transform supply chains to boost North American content; ensure half of a car’s parts come from the U. S.; use a new, stricter formula for calculating the origins of a car’s components; and do it all within a year.

“No vehicle produced today could meet such an onerous standard,” the Senate hearing was told by the Alliance of Automobile Manufacturers. “This proposal is unprecedented and would have significant ramifications on our industry and the U. S. economy, as a whole.”

The U. S. negotiating team i s urging people to tone down the rhetoric.

It apparently views such proposals as a starting point. An American source familiar with the talks pointed to evidence of the U. S. willingness to negotiate in good faith: the very broadly phrased list of American objectives published online last week.

In a few cases, that list includes specific numbers — like the demand that Can- ada relax its duties on online purchases by $ 780. In the case of automobiles, though, there are no numbers — just a reference to a desire for U.S. content in cars.

The source said this is normal in negotiating. But what’s less normal, the source said, is the public rhetoric by the Canadian side, with talk of red-lines and non-starters that will make it harder to advance negotiations.

The Canadians adopted a deliberate strategy at this round of proposing nothing on the hardest issues.

Instead, they will deliver a presentation and demand details. Along with Mexico, Canada will press the American side for clarity on how the auto proposal would work, with the subtext of that conversation being their belief that the proposal would not, in fact, work at all.

One stakeholder advising the Canadian government says the proposal was written in vague prose, was light on specifics and never gave clear indications of how it might be applied.

Flavio Volpe of the Auto Parts Manufacturers’ Association cites the examples of windshields and plastic components, which are made of sand, oil, and — going back further — carbon- based life forms that died millions of years ago.

“So if I’m a glass- maker, my raw material is sand. How am I going to trace (where) sand ( comes from)? . . . Do you do that on the granule level? Do you do it by bag? Or do you have to send a picture of the beach?” Volpe said.

“So I think it’s important we get some technical advice from the experts at ( the U. S. Trade Representative) on how exactly we’re going to do that ... A lot of plastics are petroleum- based. So what’s the methodology there — are we tracing back to bitumen, are we tracing back to sweet crude?”