The latest U.S. proposal for updating NAFTA’s automotive rules would carry a four-year phase-in to meet a higher, 75 percent regional value threshold as well as new labor content rules requiring substantial work at hourly wages of at least $16.
This story by David Shepardson and David Lawder appeared in Automotive News Canada.
A summary of the proposal, seen by Reuters and circulating among auto industry officials based on descriptions from Canadian and Mexican trade negotiators, would require the $16 wage on work comprising 40 percent of the value of light-duty passenger vehicles and 45 percent for pickup trucks.
The wage demand, pushed by U.S. Trade Representative Robert Lighthizer during intensive talks in Washington last week on modernizing NAFTA, are aimed at preserving U.S. and Canadian auto production and putting upward pressure on Mexico’s low auto wages.
The Center for Automotive Research has estimated that Mexican auto assembly workers average under $6 an hour, with workers in parts plants averaging less than $3 an hour.