The first round of NAFTA renegotiations ended Sunday with America’s lead negotiator demanding more car parts be manufactured in the U.S.
The Wall Street Journal reported that this has caused a divide between the two other NAFTA member nations, Canada and Mexico, and America. U.S. Trade Representative Robert Lighthizer said Wednesday, the opening day of the renegotiations, that the U.S. insists on tightening the rules of origin in regards to car manufacturing.
He said that President Trump “is not interested in a mere tweaking of a few provisions and a couple of updated chapters.”
The U.S. has a $68 billion deficit with Mexico when it comes to the automotive industry alone, something that was pointed out by Lighthizer. Mexico is against the proposal to substantially increase the amount of car parts manufactured in the U.S. under the pact. ”
“National content is not used in any commercial agreement in the world, because it puts too much rigidities to the companies,” Mexico’s economic minister Ildefonso Guajardo said after the first round of talks had ended. The Journal said that Canada’s foreign minister felt likewise and that pro-trade elements in Congress would be opposed to more protection of the American car industry.
Michael Stumo, chief executive of the Coalition for a Prosperous America, disagreed and told the Journal: “The administration should reject fears of supply-chain disruption asserted by the import lobby. Successful trading nations like China and Germany ‘disrupt supply chains’ intentionally, working to increase their domestic supply chains at the expense of foreign suppliers.”
There will likely be seven rounds of talks for the NAFTA renegotiation with leaders meeting next in Mexico at the beginning of September. The Trump administration has said it will withdraw from NAFTA if it is not pleased with the end result of the talks.