Ending NAFTA could cost U.S. up to 50000 auto parts jobs

Lester Mason
October 12, 2017

The fallback would also mandate the three nations in the talks - Canada, the US, and Mexico - would have to opt-in to letting the secret trade court decide cases.

US President Donald Trump has said if talks to reform North American Free Trade Agreement (NAFTA) fail, he could envisage a US-Canada trade pact, excluding Mexico.

Of course this reasoning applies if one assumes Trump wants to update NAFTA for the 21st century rather than bury it.

It's fair to say that 2017 has been a turbulent year for Mexico, given that the new White House occupant keeps making public comments threatening North American trade relations. Trudeau has said he is optimistic about the deal's fate but admitted there was room for improvement. The new economic nationalism displayed by the former leader of the Free World will encourage the same elsewhere - we tried this in the late 1920s and how'd it work out?

For its part, the Mexican Government seems resigned to the possibility that NAFTA may be coming to an end for the country.

"If the required content to hit the threshold for a NAFTA vehicle is too high, people may say, 'Look, it's just too hard, it's too high, so we'll just ship the vehicles in, '" Magna International Inc. The National Automobile Dealers Association said it was concerned about any changes that would make cars costlier.

Both Canada and the U.S. differ in the climate change.

"We're here to announce the delivery of petitions with 400,000 signatures from Americans demanding that any trade agreement eliminate rules that let businesses outsource jobs", said Rep. Rosa DeLauro, D-Conn., a veteran lawmaker known for her ability to marshal colleagues' votes. We're going to do well. Just in the first year after NAFTA took effect in 1994, GM closed a plant in her northern OH district, costing 14,000 jobs, by moving the work to Mexico.

"Among conditions demanded by the USA are a significant increase in regional content - particularly US content - in the region's exports, a uniform upper limit for government purchases, some restrictions to agriculture products coming to the US from Mexico and Canada, and the elimination of the chapter on resolution of controversies".

People briefed on USA proposals to be presented this week said Washington was seeking to sharply lift North American content threshold in auto manufacturing.

Under current rules, at least 62% of the parts in a auto sold in North America must come from the region to avoid being hit with taxes at the border.

Some observers said that with the United States' demands, it is hard to see how the negotiators could reach an agreement.

"These will be met with widespread opposition from Canada and Mexico. I think it's just a bridge too far", said Wendy Cutler, the Asia Society's Washington policy director and former chief USA negotiator for the Trans-Pacific Partnership trade deal canceled by Trump. But this elides the fact that entire industries have become tied into the continental trading system, including the supply chain for the US auto industry.

"Instead of encouraging more US content, these provisions will lead to less USA content", Wilson said.

The hard issue of rules of origin will be addressed mostly at the end of the current talks, according to a schedule obtained by Reuters. In a sign of how contentious things could get, the countries extended the negotiations for two extra days, through Tuesday. He's laid down hard demands that would be impossible for Mexico or Canada to accept.

U.S. Trade Representative Robert Lighthizer said on Wednesday the three nations had completed their negotiations on company competition policy, reaching an agreement that goes beyond previous U.S. trade deals to ensure "certain rights and transparency under each nation's competition laws".

Other reports by Iphone Fresh

Discuss This Article