U.S. Delays NAFTA Talks on Auto Content

The U.S. has delayed talks about changes in the local content rules with Canada and Mexico because its lead negotiator on the subject has been called back to Washington, D.C., according to media reports.

The seventh round of discussions about updating the North American Free Trade Agreement began on Sunday outside Mexico City. Talks specifically about local content rules for cars were to start on Monday but may be delayed until the end of the week, the reports say.

Reports say Jason Bernstein, the top U.S. negotiator for that portion of the talks, was summoned to Washington last weekend to meet with U.S. trade chief Robert Lighthizer and representatives from General Motors, Ford and Fiat Chrysler Automobiles.

The discussions were to be centered on so-called rules of origin, which dictate how much North American content is necessary to permit a car built there to be shipped tariff-free to the other NAFTA members. The Trump administration proposes that local content be raised to 85% from the current 62.5%, with half the content originating in the U.S.

Canada and Mexico have objected. Carmakers warn that an increase would severely disrupt their supply chains, raise prices, make vehicles produced in North America less competitive and eventually reduce jobs in the U.S.

This week’s round of NAFTA discussions is scheduled to conclude on March 5. The talks began last August and have made little progress on rules of origin.