NAFTA's Big Sticking Point: Major Gaps Persist between U.S., Mexico on Autos

By Panetta, Alexander | The Canadian Press, May 8, 2018 | Go to article overview

NAFTA's Big Sticking Point: Major Gaps Persist between U.S., Mexico on Autos


Panetta, Alexander, The Canadian Press


Mexico-U.S. gap remains in NAFTA auto talks

--

WASHINGTON - A clash in visions for the auto industry continued to cast doubt on the likelihood of an imminent NAFTA deal Tuesday as the three main players gathered for what could be a final effort to achieve an agreement this year.

Any hope of a deal rests on Mexico and the U.S. bridging that still-significant gap.

Sources said Mexico this week presented ideas on auto parts that differed substantially from the American goal at these talks: that is, to benefit production in high-wage jurisdictions.

Mexico's proposal lacked a firm wage standard as the U.S. has demanded, would require less North American content than the U.S. wants, ignored rules on using North American steel and would allow companies a 10-year adjustment period, more than double the proposed U.S. phase-in period.

The countries continued to say they were making progress at this round, which is potentially the final opportunity to get an agreement before elections in Mexico and the U.S. leave the talks in a freeze until 2019.

When asked how talks were going, Mexico's lead minister Ildefonso Guajardo said: ''It's going.''

He said the countries were working to find solutions that might accommodate the different countries, which he noted have drastically different economic realities. In particular, Guajardo said the countries were trying to bridge differences on the salary standard.

President Donald Trump's son-in-law Jared Kushner also sounded a positive note as he popped in and out of different sessions at the round, being held across the street from the White House.

''Very productive,'' Kushner said.

Canada's Foreign Affairs Minister Chrystia Freeland used a vivid metaphor to describe the state of the NAFTA negotiations, as countries began a multi-day push to deliver a deal.

She likened it to childbirth.

''When I was giving birth, one of my midwives said, 'You never know how long the labour will be, but you know that each contraction is one contraction closer to the baby being born.' And if I could use such a personal metaphor, that seems to apply to trade negotiations,'' she said.

''We are definitely making progress. I am not going to predict the day and the minute and the hour that we will be finished.''

Mexico and the U.S. are sharply divided over the American plan to credit companies for building cars in wealthier, high-wage countries -- in other words, outside Mexico. …

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