The third round of North America Free Trade Agreement (NAFTA) renegotiations started here on Saturday with attendance of chief negotiators from Canada, the US and Mexico.
Canada’s chief negotiator Steve Verhuel said he didn’t expect this round to see any new US proposal to increase American content requirements for autos.
Rules of origin of autos will be “a subject for discussion but we’re not expecting to see anything radically new at this point,” said Verheul.
Under NAFTA’s current rules of origin, vehicles must have at least 62.5 percent North American content to qualify for duty-free movement between Canada, the US and Mexico.
Concern has been mounting among trade experts that the year-end deadline for the NAFTA will be impossible to meet if negotiators don’t start during this round to confront some of the most contentious issues, including the rules of origin of autos.
At the first round of negotiations in Washington last month, US Trade Representative Robert Lighthizer pronounced that the North American content requirement must be raised and a specific American content requirement must be added, along with a way to verify that content.
Last Thursday, US Commerce Secretary Wilbur Ross published a column in which he blasted NAFTA for allowing outside countries to provide parts for vehicles that aren’t covered by the content requirement.
Canada reportedly believes that resolving American concerns about the exodus of automotive jobs to low-wage Mexico is the key to staving off US President Donald Trump’s threat to rip up NAFTA.
A total of seven rounds of discussions are planned for the NAFTA renegotiations, with the first two rounds being held in Washington and Mexico City separately.