Obligatory NAFTA Update: Mexico and Canada Reject U.S. Proposals as Talks Wrap Up

Matt Posky
by Matt Posky
obligatory nafta update mexico and canada reject u s proposals as talks wrap up

As the fifth round of NAFTA talks come to a close, Mexico and Canada continue to reject the United States’ demands regarding automobiles, diary, dispute panels, government procurement and the sunset clause. Among the more recent automotive proposals kicking up dirt is the U.S.’s wish to include steel in NAFTA’s tracing list and increase the mandatory local content of every car built in North America. The attempt has annoyed foreign officials and left the industry fretting about increased production costs and complexity.

The increasingly tense nature of the talks has left many wondering if President Trump will make good on his earlier threat to leave NAFTA. However, plenty of analysts are of the mind that a deal will eventually be reached between the three countries.

“It’s a lot of bluster. They’ll come up with a tweak and declare victory,” said Mark Zandi, chief economist at Moody Analytics, in an interview with Bloomberg. “At the end of the day, Trump’s a businessman, and he’s got to be listening to business people who are telling him it’s a bad idea [to pull out].”

Officials leading trade renegotiations are completing this most recent round of talks this week, after Canada and Mexico rejected what they see as irreconcilable proposals from the United States. Most contentious was the U.S. auto proposal, which would see the current rules of origin for car parts raised from 62.5 percent to 85 percent over a number of years, with a 50-percent U.S. content requirement.

Despite significant setbacks, the nations have come together on a number of other items. However, many investors and business — especially those within the automotive industry — are making decisions knowing NAFTA could crumble. As of now, no real progress on the agreement’s auto issue has been made.

Mexico is expected to host the fifth session of trade talks in November.

[Image: NAFTA Secretariat]

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  • ClutchCarGo ClutchCarGo on Oct 17, 2017

    “At the end of the day, Trump’s a businessman, and he’s got to be listening to business people who are telling him it’s a bad idea [to pull out].” Nearly everyone in his administration told him to certify the Iran nuke deal but he refused to do that, too. He makes these decisions based on personal interests, not the national interests. He wants to blow things up just to prove that he's in charge.

    • See 4 previous
    • Big Al from Oz Big Al from Oz on Oct 18, 2017

      @ClutchCarGo Clutch, My comment has nothing to do with your response.

  • Sgtjmack Sgtjmack on Oct 18, 2017

    I'm actually glad that it is taking a long time and several meetings to make the changes to NAFTA. This is not a simple agreement, and needs to be treated accordingly. There are too many tentacles involved in the three countries and the trade agreement. If it were taken care of and finalized in a few weeks and one or two meetings without some people getting upset, and having it rammed down the citizens throats, then I would question all of it. Oh, wait, that's pretty much how we got the current agreement, and it wasn't in the U.S.'s best interest. When complex issues are at stake, there needs to be time taken to iron out the wrinkles on all sides. Maybe this time it will be changed so that we actually benefit a lot more than we are under the current plan.

    • See 2 previous
    • Lou_BC Lou_BC on Oct 18, 2017

      @Astigmatism History is not a fabrication but the recording and recounting of it does get adjusted to suite the ideologies of the observer.

  • Redapple2 Why does anyone have to get permission to join? Shouldnt the rules to race in a league be straight forward like. Build the car to the specs. Pay the race entry fee. Set the starting grid base on time trials.?Why all the BS?I cant watch F1 any more. No refuel. Must use 2 different types of tires. Rare passing. Same team wins every week. DRS only is you are this close and on and on with more BS. Add in the skysports announcer that sounds he is yelling for the whole 90 minutes at super fast speed. I m done. IMSA only for me.
  • Redapple2 Barra at evil GM is not worth 20 mill/ yr but dozens (hundreds) of sports players are. Got it. OK.
  • Dusterdude @SCE to AUX , agree CEO pay would equate to a nominal amount if split amongst all UAW members . My point was optics are bad , both total compensation and % increases . IE for example if Mary Barra was paid $10 million including merit bonuses , is that really underpaid ?
  • ToolGuy "At risk of oversimplification, a heat pump takes ambient air, compresses it, and then uses the condenser’s heat to warm up the air it just grabbed from outside."• This description seems fairly dramatically wrong to me.
  • SCE to AUX The UAW may win the battle, but it will lose the war.The mfrs will never agree to job protections, and production outsourcing will match any pay increases won by the union.With most US market cars not produced by Detroit, how many people really care about this strike?