US Auto Demands a Huge Obstacle for NAFTA

NAFTA negotiators discussed rules of origin on Monday as the Trump administration’s expected demand for U.S.-specific automotive content requirements was emerging as a major obstacle to a deal, auto industry lobbyists said.

U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland arrived in Mexico City to close out the second round of talks to modernize the North American Free trade agreement on Tuesday along with Mexican Economy Minister Ildefonso Guajardo.

U.S. President Donald Trump has repeatedly threatened to abandon the 23-year-old pact unless it can be rewritten to reduce U.S. goods trade deficits of about $64 billion with Mexico and $11 billion with Canada.

“Addressing the U.S. trade deficit is a top priority in renegotiating #NAFTA,” the U.S. Trade Representative’s office said in a tweet on Monday, breaking its silence since the talks began last Friday.

Auto industry lobbyists and government officials said they did not expect the USTR negotiators to reveal specific targets on Lighthizer’s demand that a minimum percentage of North American vehicles be produced in the United States.

One lobbyist, speaking on condition of anonymity because the proposal is still under discussion, said he believed that U.S.-sourced proposal would have to be at least 35 percent to satisfy Trump, who railed against automakers for moving jobs to Mexico throughout his election campaign last year.

“Anything less would not be a political victory” for Trump, the lobbyist said.

via CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.