U.S., Mexico May Be Near Trade Deal on NAFTA

Mexico and the U.S. reportedly are close to a deal on revised rules for cars sold under the North American Free Trade Agreement.

Sources tell Bloomberg News that the two countries have exchanged new proposals and will meet in Washington on Thursday to review them. Other sources say the White House has shut out Canada, the third member of NAFTA, for the sake of reaching a quick bilateral agreement.

All three countries have been negotiating an update to NAFTA for more than a year. But Bloomberg notes that Mexico has been signaling willingness since May to compromise on such sticking points as the level of local content required to qualify vehicles for duty-free shipment between the countries.

President Donald Trump also has been pushing for an automatic five-year review of the agreement, along with a new rule that would require at least 20% of a car’s value be contributed by relatively highly paid workers.

Trump has threatened to impose 20% import taxes on cars from Mexico and Canada unless he wins significant concession on demands to update the 24-year old trilateral pact. His primary aim is to lure more auto industry jobs back to the U.S. from the two other countries.