Report: US withdraws demand of 50% American content on cars

The government of the United States has abandoned its demand that the cars produced in the NAFTA region necessarily have a content of 50% of American auto parts, Canadian paper The Globe and Mail reported (subscription required).

The change of mind occurred last week, on the occasion of a meeting in Washington between the Canadian Chancellor, Chrystia Freeland, and the U.S. Trade Representative, Robert Lighthizer, the paper posted citing anonymous sources. A spokesman for Freeland declined to comment on the report and just said Canada and the United States work together favorably.

Meanwhile yesterday, Lighthizer said during a meeting with the House Ways and Means Committee that Canada and the United States are “finally starting to converge” on the dispute that has been a key obstacle to the success of the NAFTA negotiations.

According to the Canadian news outlet, the Trump administration has introduced ideas that would essentially replace the administration’s controversial previous proposal. Lighthizer did not offer any details, but he told lawmakers that “I think we’re in a pretty good place” on the automotive file.

That optimism was echoed by Canadian Prime Minister Justin Trudeau, who said that a deal to renegotiate NAFTA was likely, amid signs negotiators may be closer to settling one of the regional trade pact’s most contentious issues. “We remain very confident that a win-win-win deal is not only possible, but likely,” Trudeau told a Toronto business audience.

The U.S. decision was also confirmed by Jerry Dias, head of Unifor, Canada’s largest private sector union, who said that Lighthizer withdrew the 50% of content demand. “NAFTA is going nowhere as long as they kept that there and I think they realized that,” he added.

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