NAFTA Trade Talks Intensify

Trade envoys from Canada, Mexico and the U.S. intensified talks today about overhauling the North American Free Trade Agreement.

Negotiators indicate they are closer than ever to agreeing within weeks on at least a preliminary deal to update the 24-year-old pact, Reuters reports. But the news service says a final accord could be months away.

Representatives tell reporters the are making “good progress” on a primary sticking point: the level of local content required for vehicles made in any of the three nations to qualify for tax-free shipment to the other two.

NAFTA currently sets that ratio at 62.5%. The U.S. has retreated from an early demand that so-called rules of origin require qualifying vehicles to contain at least 85% local content. Envoys now are wrangling over a plan that would group vehicle components into three categories, each with its own local content requirement.

The scheme would set a 85% minimum only for such high-value components such as engines and transmissions. Reuters cautions that big gaps remain between the countries’ positions after intense discussions on Thursday. Some talks are expected to continue on Friday.