Despite tough talk from the U.S. about the job-killing impact of NAFTA on its automotive sector, Canada’s chief negotiator isn’t expecting to see a detailed American proposal on the matter during the latest round of talks to rewrite the continental trade pact.
Rules of origin will be “a subject for discussion but we’re not expecting to see anything radically new at this point,” Steve Verheul said Saturday.
Verheul made the comment as he arrived for the start of the third round of negotiations, the first at which Canada is playing host.
Concern has been mounting among trade experts that the year-end deadline for revamping NAFTA will be impossible to meet if negotiators don’t start during this round to confront some of the most contentious issues, rules of origin prime among them.
Asked if he expects anything radically different on any file, Verheul said: “We’ll really have to see. It’s too early, I’m just walking in now.”
Under NAFTA’s current rules of origin, vehicles must have at least 62.5 per cent North American content to qualify for duty-free movement between Canada, the U.S. and Mexico.
U.S. looking to add steel, electronic provisions
At the opening round of negotiations in Washington last month, U.S. Trade Representative Robert Lighthizer pronounced that the North American content requirement must be raised and a specific American content requirement must be added, along with a way to verify that content.
But the U.S. has yet to provide any details.
Reports in the U.S. suggest the Americans are looking at raising the North American content to more than 70 per cent and adding a specific U.S. content requirement of anywhere from 35 to 50 per cent.
They are also looking to add steel and electronics, not currently covered by NAFTA, to the list of auto parts whose origin must be traced and accounted for under the content requirement.
On the eve of the third round, U.S. Commerce Secretary Wilbur Ross published a column in which he blasted NAFTA for allowing outside countries to…