Mexican Economy Minister Ildefonso Guajardo said demands by the Trump administration for a U.S.-specific automotive content requirement in NAFTA was “not viable,” and declined to specify when Mexico would formally respond.
This story by Reuters appeared in Automotive News Canada.
At a news conference following a series of meetings with senior U.S. trade officials and lawmakers in Washington on Wednesday, Guajardo said that Mexico was still trying to understand the U.S. proposals that would require 50 percent of vehicles’ value content be produced in the U.S. as part of updated North American Free Trade Agreement rules.
He added that Mexico would eventually make a counterproposal on automotive rules of origin, but declined to specify the timing of that response.
His visit was partly aimed at bolstering support in Congress for NAFTA at a time when tax legislation is consuming lawmakers’ attention and U.S. Trade Representative Robert Lighthizer is growing frustrated with the slow pace of NAFTA talks.
U.S. President Donald Trump has repeatedly threatened to scrap the trade agreement if it cannot be renegotiated to shrink U.S. trade deficits and return manufacturing jobs to the U.S.
House Speaker Paul Ryan said after meeting with Guajardo earlier on Wednesday that congressional Republicans “are determined” to strengthen trade ties with Mexico.
After the last NAFTA negotiating round ended last week, Lighthizer complained that Mexico and Canada had not offered counterproposals to its demands on autos and other major areas aimed at “rebalancing” the trade pact.
The United States also is seeking to lift the regional value content requirement for NAFTA-produced cars and trucks to 85 percent from 62.5 percent. Guajardo said that once Mexico has a firm understanding of the U.S. autos proposal, it can work with its own stakeholders to see what adjustments could be made to regional content for autos.
But he said that the U.S. demand to move to 85 percent regional content within three years was “entirely unrealistic.”
