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"Good Progress" But No Breakthrough in NAFTA Talks
Trade officials say they continue to make “good progress” this week on a revised NAFTA pact, even though a breakthrough doesn’t appear imminent.
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Trade officials say they continue to make “good progress” this week on a revised NAFTA pact, even though a breakthrough doesn’t appear imminent.
A continuing challenge in updating the North American Free Trade Agreement is resolving local content levels required for cars to avoid tariffs when shipped between Canada, Mexico and the U.S. Current rules of origin demand 62.5% local content. The U.S. got nowhere in proposing the percentage be raised to 85%, with 50% coming from the U.S.
Now envoys are looking at a revised plan that would require 75% local content overall, but with varying specific targets depending upon the type of vehicle component. Calculations also would credit such value-adds as local product engineering and development.
Another new element in the latest U.S. plan would require that 40% of cars and 45% of pickup trucks be built in countries where hourly wages are at least $16, meaning Canada and the U.S. Mexico has branded that scenario as unacceptable and plans to present its own proposal this week.
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