Mexico Sees U.S. Demands for More American Content in American Cars as Unworkable

By Sahid Fawaz

Mexico is not warming up at all to U.S. demands for more American content in American cars.

Bloomberg.com reports:

“The Mexican government views the U.S. proposal for tightening content rules for car manufacturing under NAFTA as not viable and likely to cause serious damage to the North American auto industry, said a person familiar with the nation’s stance.

Mexico hasn’t prepared or presented a counter-proposal because it sees the problem as going beyond the specific levels sought by the U.S. and thinks the entire concept is unworkable, said the person, who asked not to be identified discussing negotiations taking place behind closed doors.

The Trump administration has proposed major changes to Nafta’s auto rules, introducing a requirement that 50 percent of parts or vehicles be U.S.-made, and increasing the minimum amount of regional content needed to 85 percent from 62.5 percent. The U.S. auto industry has pushed back against the idea, and more than 70 House Republicans and Democrats also opposed it in a recent letter.

President Donald Trump has threatened to withdraw from Nafta, which he blames for hundreds of thousands of lost jobs in U.S. manufacturing, if he can’t renegotiate the deal. Mexico, Canada and the U.S. started talks in August and plan to continue them until at least March.

At the current round taking place in Mexico City, which lasts until Nov. 21, U.S. negotiators have given no indication that they’re willing to compromise on their proposal for a mechanism that would automatically end the North American Free Trade Agreement after five years, the person said. Mexico and Canada have said they’re willing to review NAFTA every five years as long as the evaluation doesn’t lead to automatic termination.”

For the rest of the piece, check out the entire article at Bloomberg.com here.

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