U.S., Mexico push for NAFTA auto deal, eye bringing Canada back to talks

General Motors’ assembly plant in the city of Silao, Mexico Photo credit: REUTERS

WASHINGTON — U.S. and Mexican trade ministers were set to resume talks over the North American Free Trade Agreement in Washington on Tuesday in a final push for a deal on autos that would open the door for Canada to return to negotiations this week.

If Mexican Economy Minister Ildefonso Guajardo and U.S. Trade Representative Robert Lighthizer can resolve remaining bilateral issues, “the plan is to try to incorporate Canada into the discussions,” possibly as early as Thursday, said a Mexican source close to the talks.

Though NAFTA is a trilateral trade deal, “there are issues that are really bilateral issues between Mexico and the United States,” said the source. In rules of origin for autos “Mexico clearly had to look for flexibilities because Canada was relatively comfortable with the original [U.S.] proposal.”

In the meantime, Canada has remained sidelined from the talks.

“We are making progress in the chapters that will modernize our agreement, and Mexico will continue working constructively on all fronts,” Mexico’s chief NAFTA negotiator, Kenneth Smith, said on Twitter on Tuesday.

The United States and Mexico are close to a deal to increase North American automotive content thresholds, with substantial requirements for content produced in high-wage areas, namely the United States and Canada, said the source.

The deal is expected to lift the requirement for North American content in regionally made vehicles to at least 70 percent from the current 62.5 percent. It will also likely require that some 40 percent of the value come from high-wage locations paying at least $16 an hour, meaning the United States and Canada.



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