Canada May Rejoin NAFTA Talks This Week

Talks between Mexico and the U.S. about the North American Free Trade Agreement may be rejoined by Canada as soon at this week, a source tells Reuters.

The three countries began discussions a year ago about updating the 24-year-old pact. Trilateral negotiations stalled last spring as trade relations between the U.S. and Canada turned frosty.

Canada has been on the sidelines the NAFTA discussions were revived by Mexico and the U.S. in July. Negotiators note there are certain U.S. demands, such as local content requirements and wages paid to workers, that are particular to Mexico.

Mexico and the U.S. are likely to agree on raising local content to 70% from the current 62.5%. Under the scheme, 40% of content value would come from countries—namely Canada and the U.S.—that pay at least $16 per hour, according to Reuters. The news service’s source says the changes are likely to be implemented over five years.

Those two U.S. demands reflect President Donald Trump’s desire to draw more manufacturing jobs back to the U.S. Critics say disrupting the auto industry’s North American supply chain too much will risk plant closures instead.

Ten foreign carmakers with existing U.S. plants say it could take many of them years to meet the proposed higher local content target. The group, called “Here for America,” notes that its factories account for almost half of all U.S. vehicle production.