US, Mexico working to bring NAFTA auto proposals together

Elias Hubbard
August 4, 2018

The United States and Mexico are nearing a deal on the key issue of autos content rules at talks to renew the North American Free Trade Agreement, Mexican and Canadian officials said on Wednesday.

Guillermo Malpica, head of the trade and NAFTA office for the Mexican government, told an automotive sector conference in MI that the United States "started showing more flexibility last week" on content and other contentious issues.

Emily Davis, a spokeswoman for Lighthizer, declined to comment on the automotive negotiations.

Some saw that as a sign that the Trump administration wants to play hardball, signaling that Canada must offer concessions if it wants to join in the free trade deal with the USA and Mexico.

Stop-start talks to renegotiate NAFTA have dragged on for more than a year, with similar moments of optimism in the past.

Canadian trade negotiator Colin Bird told an auto-industry conference in MI on Wednesday that NAFTA negotiators are making progress on auto-content rules and endorsed the concept of linking those rules to improving workers' wages. They also met face to face last week. Trump and his advisers clearly believe the US has more bargaining power when negotiating bilateral deals, while Canada has a long-standing interest in strong multilateral rules-based institutions.

Trade talks between the two countries have intensified since the recent election win by Mexico's president-elect Andres Manuel Lopez Obrador, who has assigned his own experts to work with officials from the outgoing administration on pursuing an updated NAFTA before he takes office December 1.

The official also noted that the US and Mexico have issues to figure out between themselves, such as their differences on labour changes in the auto sector, textiles and seasonal fruits. -Mexican meetings on NAFTA.

The countries - long term USA allies at odds with Trump over trade relations - were all determined to respond if tariffs on cars were imposed under a national security investigation, he said, noting the US process to introduce such tariffs had not halted despite U.S.

While Andres Manuel Lopez Obrador (known as AMLO) says he wants a successful outcome to the NAFTA talks, he's an outspoken critic of U.S. President Donald Trump. Commerce Secretary Wilbur Ross said on Monday that negotiations with Mexico are going well and may be close to wrapping up. But if Canada signed separate bilateral trade agreements with the US and Mexico, Canadian companies would likely face more complicated and costly rules of origin to obtain duty - free access to the USA and Mexican markets (to the extent that different rules govern the two bilateral agreements).

Mexico balked at the prospect of foreign intervention in salaries, but the debate has shifted, Mr. Guajardo said.

Other reports by Click Lancashire

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