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Could NAFTA talks stall over US car demands?

Monday, November 20, 2017 - 01:51

Canada and Mexico will apparently not make counterproposals to U.S. demands for tougher NAFTA automotive content rules but instead will offer rebuttals and pepper American negotiators with technical questions later on Monday. As Ciara Lee reports, the rebuttal is expected to come as negotiators resume discussions on automotive rules of origin in the fifth round of talks to update the North American Free Trade Agreement.

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A fifth round of talks... proving no less frustrating than the fourth for some The US, Canada and Mexico continue to update the 23-year-old North American Free Trade Agreement. Canada and Mexico say they will not make counterproposals to U.S. demands for tougher NAFTA automotive rules. The Trump administration is demanding half of parts or vehicles be U.S.-made. And that regional vehicle content requirement be increased to 85 percent from the current 62 percent. (SOUNDBITE) (English) CANADIAN UNION LEADER, JERRY DIAS, SAYING: "As long as there is a perception that NAFTA is falling apart, nobody is in a position to really make any moves. As long as Canada believes that the United States doesn't want a deal then there is not going to be a consensus or an agreement on even the low hanging fruit. It is hard to bargain with somebody who is inconsistent. So as long as the U.S. has those proposals on the table, nothing is going anywhere on any of the tables." Trump's goal is to stem the flow of U.S. carmaking jobs going to low-wage neighbour Mexico. (SOUNDBITE) (English) IG, MARKET ANALYST, CHRIS BEAUCHAMP, SAYING: "There seems to be a sort of perverse desire in Washington to see this fall apart if only to improve in Trump's view on the situation. It is a slight worry at this point that one of the world's major free trade agreements could actually weaken significantly in the next few weeks." The talks resume in Mexico City this week - and there are some within the country keen to see them fail. Mexico's mainly indigenous farmers blame painful competition on the free trade deal. Mexico now imports over $18 billion of agriculture products every year Negotiators have reportedly been making progress on less contentious issues of the agreement though. The more divisive, mostly American protectionist issues, will likely have to wait for future rounds.