Canada’s chief NAFTA negotiator delivered a stark warning to MPs on Monday, telling them that changes proposed by the U.S. would hit the North American auto industry hard.
Steve Verheul told MPs sitting on the trade committee the U.S. auto proposals, which include 85 percent regional content and 50 percent U.S. content when it comes to rules of origin, are “wholly unworkable.”
This story by Greg Layson originally appeared in Automotive News Canada.
NAFTA currently requires vehicles include 62.5 percent of North American content to qualify for duty-free status in Canada, Mexico and the U.S.
If content requirements were increased to 85 percent, automakers would not be able to access enough vehicle content from North America to meet that requirement, Verheul said.
A mandate that vehicles have percent U.S. content would also damage Canada and Mexico because it would lure manufacturing to the U.S. from Canada and Mexico, Verheul said.
The sixth round of NAFTA talks is scheduled to begin Jan. 23 in Montreal. An inter-sessional period of talks between officials from all three countries is to be held in Washington during the week of Dec. 11.
