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Movement on Autos Positive for NAFTA Renegotiation

The Canadian Global Affairs Institute suggests resolution of issues related the auto sector could provide the incentive needed to conclude the renegotiation of NAFTA.

Last month the U.S. and Mexico reached a provisional agreement on trade and discussions with Canada have now resumed in earnest.

Colin Robertson, the Vice-President and a fellow of the Canadian Global Affairs Institute, says the Trump administration is eager to be able to declare victory and claim they've gotten a better deal on NAFTA.

Clip-Colin Robertson-Canadian Global Affairs Institute:

You can be certain that Mr. Trump will be first to say that, in terms of the most traded commodity, that he has got a deal that will result in more made in USA content.

The agreement with Mexico is that 75 percent of any auto made in the U.S. and Mexico would have to have U.S. and Mexican content and that 40 percent of that, if you're making a car that the wage in Mexico would be more than 16 dollars.

If you're making a truck that would apply for 45 percent of the content, so 40 percent for cars and 45 percent for trucks.

Canada can probably live with both those provisions and then Mr. Trump can say that he's significantly increased from 62.5 percent to 75 percent North American content.

There's also a provision in the Mexico U.S. agreement for significant amounts of North American made steel and aluminum.
Again Mr. Trump will, I think, proclaim that this is a victory.

So part of what the Canadian and Mexican negotiators have been trying to determine is what is it that we have to do to give Mr. Trump a win and so we think this is probably one area where he can declare he's got a win.

Robertson points out the President notified Congress Friday that he expects to deliver a U.S. Mexico agreement and possibly a trilateral agreement within 30 days so the clock is ticking and an agreement will be needed by the end of this month to meet that time line.

For Farmscape.Ca, I'm Bruce Cochrane.

Source : farmscape

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