By on March 3, 2019

U.S. Trade Representative Robert Lighthizer will be in Michigan this week to meet with union leaders from United Auto Workers in a bit to gain their approval for the Trump administration’s new North American free trade deal. Lighthizer is scheduled to meet with union officials in Dearborn on Tuesday to answer questions about the United States-Mexico-Canada Agreement (USMCA) while simultaneously drumming up support.

The USMCA deal suggests increasing existing requirements for North American content for vehicles, stipulating that 40 percent of a vehicle’s overall content be manufactured in areas paying at least $16 an hour, while also encouraging Mexico to tailor its labor rules to allow unions to wield legitimate collective bargaining powers.  (Read More…)

By on November 14, 2018

The Trump administration was supposed to make an announcement Tuesday as to whether or not imported automobiles pose a national security risk, following discussions with trade representatives. While it wasn’t presumed that the White House would say anything truly definitive or hold a formal press conference on the issue, it was assumed that the president would take a stronger public stance either for or against an earlier proposal to raise foreign auto import tariffs to 25 percent. And it has, in a way.

According to those familiar with the matter, the White House decided to postpone any major decisions after discussing a draft Commerce Department report on the impact of auto imports with trade reps. However, the administration doesn’t have forever to make up its mind. Nor does its trading partners, which could be the point.  (Read More…)

By on September 26, 2018

Canadian Prime Minister Justin Trudeau ignored mounting pressure from the United States to quickly agree to a new NAFTA deal on Wednesday. Trudeau indicated it was possible for the three nations to maintain a trilateral agreement, but noted his priorities would always align with what’s best for Canada. The nation now seems fine with ditching the agreement altogether.

Meanwhile, U.S. President Donald Trump announced that an agreement reached with Japanese Prime Minister Shinzo Abe allows the two countries to begin trade negotiations. The focus of these talks will likely be automotive in nature. Trump has remained oddly fixated with convincing Japan to sell more American-made models ever since taking office, and the Land of the Rising Sun doesn’t want itself saddled with import tariffs.  (Read More…)

By on September 25, 2018

FCA Windsor minivan assembly Dodge Grand Caravan 2011 - Image: FCA

U.S. Trade Representative Robert Lighthizer has said the United States will begin moving forward on its bilateral trade deal with Mexico at the risk of leaving Canada behind.

The nation was already given until the end of September to reach an agreement that would effectively maintain the existence North American Free Trade Agreement, but has not indicated satisfaction with the current terms. Unfortunately, the U.S. wants to ensure a deal is in place before the next Mexican president assumes office — giving it precious little time to spend on Canada after the last year’s worth of negotiations proved ineffective.

“If we push it beyond [October 1st], then we have a new negotiation with Lopez Obrador and we don’t know where that would go at all,” Lighthizer said. “It would be unfair to all the people that have been involved — certainly the U.S. workers, farmers and ranchers — to start a new negotiation with a new president of Mexico.”  (Read More…)

By on September 21, 2018

nafta-secretariat

The United States is getting extremely close to having to move forward on its NAFTA deal with Mexico without Canada, according to White House economic adviser Kevin Hassett.

“I’m a little surprised that the Canadians haven’t signed up yet,” Hassett said in an interview with Fox News. “I worry that politics in Canada is trumping common sense because there’s a very good deal that was designed by Mexico and the U.S. to appeal to Canada. And they’re not signing up and it’s got everybody over here a little bit puzzled.”

On Thursday, Canadian Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer met in Washington to discuss terms. However, no agreement was reached.  (Read More…)

By on June 5, 2018

nafta-secretariat

Governance is one hell of a slippery fish. While you want your elected officials to assist in helping the nation evolve with an ever-changing society, you don’t want a deluge of contradictory and ill-planned laws mucking things up. That’s why the best progress is carefully measured and negotiated. But something has to happen eventually or you begin wondering what we (and the various lobbies) are paying these dingbats the big bucks for.

For example, the North American Free Trade Agreement looks like it’s about to be abandoned until sometime after 2019. After negotiations missed numerous self-imposed deadlines, U.S. House Speaker Paul Ryan said Congress needed a notice of intent to sign by roughly May 17th if anything was to be finalized for 2018. That date came and went. Now, everyone appears to have thrown their hands up, with practically every country on the planet currently considering retaliatory tariffs against the United States.  (Read More…)

By on January 29, 2018

Nissan titan assembly Canton Factory

After what could be called some of the least productive negotiations in North American history, some progress is finally being made on the North American Free Trade Agreement. We know, with all of the negative rhetoric being slung from all sides, it sounds impossible. However, all three trading partners are beginning to bend on some of the issues that have proven the trickiest to navigate.

Among them is the faintest glimmer of hope that the automotive content requirements pushed by the United States might be adopted by the other nations, albeit in a modified form.

Still, progress is progress, and it only took about six months to get to a point where some meaningful headway could finally be made. Absolutely incredible. Let’s give these officials a huge round of applause for really getting in there, taking care of business, and not wasting a bunch of time.  (Read More…)

By on December 28, 2017

Jerry Dias, Unifor President, Image: OFL Communications Department (Flickr) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

With everyone weighing in on the ultimate fate of the North American Free Trade Agreement, it almost seems as if we’re cataloging their bets to see just how right or wrong they’ll be in the negotiatory aftermath. Considering there has been such a limited amount of progress on the trade talks, there honestly isn’t much else to do.

Suggesting that NAFTA is “is going to blow up in 2018,” Jerry Dias, president of the Canadian union Unifor, has planted his flag on the side of a total breakdown of the agreement. Unifor represents 23,500 Detroit Three auto workers living north of the border, plus some 16,000 working in the supply chain.

As a union leader, Dias is prone to hyperbolic statements. However, his insight into the situation runs a little deeper than most. (Read More…)

By on December 17, 2017

nafta-secretariat

In case you haven’t kept up with the coverage on the renegotiation of the North American Free Trade Agreement, things haven’t gone well. Despite wrapping the latest round of talks in Washington on Friday, negotiators have made no clear progress on updating the trade deal. Considering a new deal is supposed to be finalized by the end of March, it’s beginning to look as if the NAFTA revamp might be doomed.

The biggest issue crippling the talks continues to be regional-content requirements for cars to qualify for NAFTA benefits. Both Mexico and Canada have described the U.S. content proposals as “unworkable.” (Read More…)

By on November 16, 2017

us-capitol, public domain

A bipartisan group of over 70 members of the U.S. House of Representatives has asked the Trump administration to reconsider its North American Free Trade Agreement proposal on auto parts rules of origin. Seen as a sunset clause by Canada and Mexico that tweaks international agreements to lower the United States’ trade deficit, the rule has also received some serious blowback from domestic automakers. They’ve even used trade groups to craft awareness campaigns and reach out to congress, a decision that appears to be working.

Currently, NAFTA mandates at least 62.5 percent of the materials used in a car or light truck be sourced from North America in order to avoid tariffs. The Trump administration’s proposal would up that requirement to 85 percent, with 50 percent of the total being from the United States. (Read More…)

By on September 29, 2017

nafta-secretariat

President Donald Trump entered into office threatening to abandon the North American Free Trade Agreement if the United States was not given a better deal immediately. But, after negotiations began, it looked as if his ultimatum would be unnecessary.

Now, U.S. officials involved in NAFTA negotiations are being accused of making proposals on issues Mexico and Canada have said they would never agree to. Are these bold negotiation tactics being used to place the U.S. in a better position for future issues, or are trade arbitrators intentionally trying to sabotage talks so Trump can make good on his promise to leave the agreement?   (Read More…)

By on August 18, 2017

made-in-usa

When Donald Trump took office, one of his first presidential acts was to rally domestic automakers for a series of meetings and promise to remove regulatory barriers. As the administration was a self-described ally to the car industry, the claim appeared genuine. There was some tough talk about foreign involvement but, for the most part, Trump appeared to be in domestic manufacturers’ corner.

As focus shifted toward the renegotiation of the North American Free Trade Agreement, automakers had one request: to not impede cross-border trade. It was their primary concern leading up to this week’s talks.

Two days later and the issue has become a major sticking point; placing auto industry groups from Canada, Mexico, and the United States at odds with the current administration. As NAFTA talks began in Washington, D.C., automaker and parts groups from all three countries began outright pleading with U.S. negotiators to abandon their push for tighter rules of origin. Now they are formally opposing it.  (Read More…)

By on July 18, 2017

Old Assembly Factory floor

Despite President Trump having initially framed his proposed NAFTA renegotiations as a hardline “America First” endeavor, the administration’s stance has soften significantly. In a recent summary of objectives, U.S. Trade Representative Robert Lighthizer highlighted fairness as the key issue throughout.

Absent were any mention of abandoning the deal if certain conditions were not met and the steep tariffs previously alluded to by the president. In fact, any mention of tariffs specifically targeted their reduction or elimination — for both imported and exported goods. There are, however, numerous examples that reaffirm the Trump administration’s earlier objectives and a handful of inclusions that should please domestic automakers. (Read More…)

By on June 22, 2017

us-capitol, public domain

U.S. Trade Representative Robert Lighthizer said on Wednesday there was no definitive timeline for completing NAFTA trade renegotiations. Discussions haven’t even begun between the United States, Canada, and Mexico but legislators and executives have already warned prolonged negotiations would likely be detrimental to their interests.

The automotive industry is mainly seeking a swift and unambiguous update that doesn’t rock the boat too severely. Every day there is no consensus on the trade agreement is another day it has to postpone large investments. Ideally, the U.S. wants the redrawn NAFTA to prioritize its workforce and industry, while the Trump administration aims to tax imports and force companies to do more business within its borders. But, with nothing finalized, many automakers are in a holding pattern. Volkswagen, for example, is putting off decisions on major U.S. investments until it becomes clearer what course NAFTA will take.  (Read More…)

By on May 18, 2017

us-capitol

U.S. Commerce Secretary Wilbur Ross want to begin formal talks to renegotiate the North American Free Trade Agreement with Canada and Mexico in a little over three months, adhering to the campaign pledges made by President Donald Trump last year. Ross explained to reporters that “sometime in the next couple of weeks” he will issue a notice to Congress stating the Trump administration intends to start formal NAFTA negotiations in just 90 days.

However, since he expressed his intentions in front of a gaggle of reporters, Congress is probably already aware. But it won’t be “official” until they get a piece of paper signed by the appropriate parties on the applicable letterhead — hopefully, embossed with a fierce-looking eagle surrounded by dollar signs.  (Read More…)

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