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Autos likely high on U.S. NAFTA agenda

Early indications suggest automobiles will emerge as first priority on Day 1 of NAFTA negotiations
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U.S. Trade Representative Robert Lighthizer, left, shakes hands with Canadian Foreign Affairs Minister Chrystia Freeland, accompanied by Mexico香蕉视频直播檚 Secretary of Economy Ildefonso Guajardo Villarreal, after they spoke at a news conference on Wednesday at the start of NAFTA renegotiations in Washington. (AP Photo/Jacquelyn Martin)

WASHINGTON 香蕉视频直播 Early indications are pointing to a potential No. 1 priority for the U.S. in a renegotiated NAFTA: automobiles.

It香蕉视频直播檚 the specific issue that was mentioned first, at greatest length, and in most detail by Donald Trump香蕉视频直播檚 trade czar as talks got underway Wednesday.

Robert Lighthizer pointed to the carnage in the manufacturing sector as the reason so many Americans view NAFTA as a failed agreement.

香蕉视频直播淭housands of American factory workers have lost their jobs because of these provisions,香蕉视频直播 Lighthizer said in his opening remarks.

He cited priorities for the sector, designed to boost production of parts in North America, and in the United States.

Industry members are warning Lighthizer to handle the matter with care as the details are complicated, and any wrong moves could either drive up vehicle prices.

There香蕉视频直播檚 also a risk that changes could make North American producers less competitive, or even force them to just ignore the new rules and simply pay a tariff that would be passed along to consumers.

Lighthizer listed four priorities for the sector:

香蕉视频直播 A higher North American content requirement to avoid a tariff. The current rule of origin calls for 62.5 per cent of a car香蕉视频直播檚 parts to be made in North America.

香蕉视频直播 Substantial U.S. content in cars. It was unclear whether he was advocating a new, specific requirement for U.S. content 香蕉视频直播 a move that would surely be controversial 香蕉视频直播 or whether he was simply stating that the desired changes should positively affect the region, with more cars being made in the U.S.

香蕉视频直播 Stricter monitoring to make sure companies comply with the rules of origin. Lighthizer said country of origin 香蕉视频直播渟hould be verified, not deemed.香蕉视频直播 Labour provisions should be included in the agreement and be as strong as possible.

香蕉视频直播 Tougher labour standards. Some insiders in Canada and the U.S. suggest better worker conditions in Mexico, and more pay, would not only be good for Mexicans but also for making non-Mexican production more cost-effective and preserving vehicle production in Canada and the U.S.

A Canadian auto-industry representative at the talks said he香蕉视频直播檚 not worried by what he heard: 香蕉视频直播淭here香蕉视频直播檚 no anxiety about it with us,香蕉视频直播 said Flavio Volpe, president of the Automotive Parts Manufacturers香蕉视频直播 Association.

For example, Volpe interpreted Lighthizer香蕉视频直播檚 words to mean that he香蕉视频直播檚 hoping for more production in the U.S. as a spinoff effect of a stronger North American industry, not as a demand that plants move there from other countries.

But he urged negotiators to be very careful when touching the current rules. He warned of ample possibilities for unintended consequences.

香蕉视频直播淚t香蕉视频直播檚 not simple,香蕉视频直播 Volpe said. 香蕉视频直播滻f you make it too onerous, does a company or supplier say, 香蕉视频直播楩orget about compliance. I香蕉视频直播檒l just pay the tariff.香蕉视频直播櫹憬妒悠抵辈

That means production would actually shift abroad: companies would simply pay the tariffs, ranging from 2.5 to 6.1 per cent, as a cheaper alternative to following complicated new rules.

It香蕉视频直播檚 also risky to try requiring companies to produce certain products at home, Volpe added: some industries that produce certain types of electronics for automobiles simply don香蕉视频直播檛 exist in North America.

Finally, damaging Mexican competitiveness can boomerang on companies from the other countries.

He said Canadian auto-parts companies have 43,000 employees in Mexico.

Alexander Panetta, The Canadian Press





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