U.S.-Mexico NAFTA talks drag on as autos sticking factors emerge

By David Shepardson and David Lawder WASHINGTON (Reuters) – Talks between the US and Mexico over the way forward...

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By David Shepardson and David Lawder

WASHINGTON (Reuters) – Talks between the US and Mexico over the way forward for the North American Free Commerce Settlement have been set to pull into subsequent week, as auto trade officers mentioned on Friday that new sticking factors had emerged over President Donald Trump’s menace to impose steep automotive tariffs.

Auto trade officers conversant in the talks mentioned the Trump administration desires the power to impose nationwide safety tariffs on future Mexican manufacturing from new auto meeting and elements vegetation.

These officers mentioned U.S negotiators had primarily agreed {that a} new NAFTA commerce deal would exempt current Mexican auto vegetation from any “Part 232” tariffs that Trump might impose.

However the U.S. negotiators don’t wish to apply the identical ensures to new Mexican auto vegetation, the officers mentioned, because the potential menace of 25 p.c tariffs would discourage new automotive funding in Mexico to serve the U.S. market.

At Trump’s course, the Commerce Division in Might launched a probe into whether or not imports of automobiles, vehicles and auto elements pose a nationwide safety danger, invoking the identical 1962 commerce regulation used to justify broad tariffs on metal and aluminum — together with these imposed on Canada and Mexico.

Administration officers and congressional aides have mentioned the automotive tariff probe, just like the metals tariffs, partially is aimed toward profitable concessions throughout ongoing NAFTA renegotiation talks.

Trump late on Friday tweeted {that a} “cope with Mexico is coming alongside properly. Autoworkers and farmers should be taken care of or there will likely be no deal,” including that Mexican president-elect Andres Manuel Lopez Obrador “has been an absolute gentleman.”

Trump added that Canada “should wait” to rejoin the NAFTA talks. “Their Tariffs and Commerce Boundaries are far too excessive. Will tax automobiles if cannot make a deal!” Trump tweeted.

Adam Austen, a spokesman for Canadian Overseas Minister Chrystia Freeland, who’s main NAFTA commerce talks for Canada, mentioned the minister was in common contact along with her Mexican and U.S. counterparts.

“We’re glad Mexico and the U.S. proceed to work out their bilateral points. It’s the one approach we’ll get to a deal,” Austen mentioned.


Mexican Economic system Minister Ildefonso Guajardo instructed reporters in Washington on Friday his talks with U.S. Commerce Consultant Robert Lighthizer would resume subsequent week, however there have been nonetheless many bilateral points to work out earlier than Canada may rejoin the talks.

Requested about progress on autos guidelines of origin, he mentioned: “Nothing is shut till every little thing is shut, however there are gadgets in each component that’s being mentioned.”

Guajardo mentioned that when bilateral U.S.-Mexican points have been resolved, Canada may rejoin the talks to work on tri-lateral points. He mentioned this might happen in “the subsequent few days or even weeks.”

Business officers additionally mentioned the U.S. staff had barely moved from its calls for final Might of a 75 p.c total regional content material threshold with 40-45 p.c content material from high-wage zones — successfully the US and Canada — with the one substantial change a barely longer phase-in time.

The automotive officers mentioned that Mexico had sought reassurances that new content material guidelines wouldn’t trigger losses of current services or jobs within the sector and {that a} NAFTA deal would make Mexico resistant to any automotive tariff Trump imposes on nationwide safety grounds.

However the U.S. aspect was sticking to a tough stance within the closing stretch of the year-old NAFTA talks, attempting to extract concessions as one other late August deadline for a deal approaches, one trade consultant mentioned.

The problems the 2 international locations are hammering out embrace what share of auto trade elements should be made in North America to keep away from tariffs, and what number of automobiles and vehicles should be made in factories paying increased wages.

The U.S.-Mexico talks for a reworked North American Free Commerce Settlement resumed three weeks in the past, with out Canada, after negotiations involving all three members of the $1.2 trillion commerce bloc stalled in Might.

(Reporting by David Shepardson and David Lawder in Washington, and Christine Murray in Mexico Metropolis. Writing by David Lawder; Modifying by Nick Zieminski and Diane Craft)

This story has not been edited by Firstpost employees and is generated by auto-feed.

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