The U.S. Trade Representative’s office has called back its chief negotiator for NAFTA’s car-related issues to Washington from ongoing talks in Mexico City to meet with American industry representatives, according to three people familiar with the process.
Further NAFTA negotiations on rules of origin for cars, which started on Sunday, have been postponed in the absence of Jason Bernstein, the top U.S. negotiator on the topic, according to two people familiar with the move, who asked not to be identified because talks are being held behind close doors.
Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association, said by phone from Mexico City that Bernstein had returned to Washington for a series of meetings on rules of origin, with the U.S. automobile and other industries. The USTR declined to comment.
Nantais said he expects U.S. carmakers “to make it very clear as to the importance of their operations to American jobs,” and that a modernized NAFTA is their preference over U.S. withdrawal from the pact. “These meetings should not come at a surprise when there’s so much at stake,” he said.
Bernstein could still return to Mexico City later this week, Nantais said. The two people familiar with negotiations said talks on the rules of origin, which govern how much regional content a car must have to enjoy NAFTA’s duty-free benefits, could resume as soon as this week. The current round is due to run until March 5.
Inside U.S. Trade, a news service, previously reported the negotiator was called back to Washington for meetings.
In a bid to revive U.S. factories, the White House has proposed raising the regional automotive rules of origin for passenger cars to 85% from 62.5% and add a U.S.-specific requirement of 50%.
Automakers warn the proposals would upend supply chains that rely heavily on NAFTA. Canada at the last negotiating round in Montreal proposed its own ideas on how to calculate the value of regional content in vehicles, including giving more credit for driverless and electric cars, plus research and development work. U.S. Trade Representative Robert Lighthizer called the Canadian proposal on cars “vague,” and argued it would reduce the share of a vehicle made within the region.
Flavio Volpe, president of the Canadian Automotive Parts Manufacturers’ Association, which opposes the U.S. proposal on rules on origin, welcomed the U.S. government doing more industry consultations. “Finally,” Volpe said. “I couldn’t think of a better reason” for Bernstein to return to Washington.
While Mexico’s automobile association, known as AMIA, has said it opposes a higher content rule for cars, Economy Minister Ildefonso Guajardo has signaled that the rules probably will need to be strengthened to reach a deal.
The U.S., Mexican and Canadian governments began renegotiating the North American Free Trade Agreement in August at the initiative of President Donald Trump, who has promised to negotiate a better deal for America or withdraw.
by Eric Martin and Josh Wingrove