Monday, August 27, 2018
U.S. and Mexico reach preliminary agreement on auto trade; deal doesn’t include Canada or address other NAFTA issues
“The U.S.-Mexico deal would require 75 percent of auto content to be made in the NAFTA region, up from the current level of 62.5 percent, a second U.S. official said. A draft fact sheet specified the content would be made in the United States and Mexico,” Roberta Rampton and Jeff Mason reportfor Reuters.”The deal also would require 40 percent to 45 percent of auto content to be made by workers earning at least $16 per hour, the second official said.”
“While Canada has not been a party to recent discussions, the potential for a two-country deal appears highly unlikely, given opposition by Mexico, American lawmakers and North American industries whose supply chains rely on all three countries,” Swanson and Rogers report. “Instead, Mr. Trump’s threats against Canada could prove to be a negotiating tactic. Both Mexican and American officials have said they hope their progress encourages Canada to come back to the negotiations quickly.”
The Washington Post reports, “Even if a deal does ultimately make its way to Capitol Hill, Congress is certain to struggle to pass it given divisions over trade in both parties. The difficulties would only increase if the pact is not finalized before the November midterm elections and Democrats retake control of the House. If Canada doesn’t sign off, it is unclear what Trump might do, as he has threatened to try to cancel the entire trade pact.”
