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Trump Administration Seeks to Shake Up NAFTA Talks with Auto-Making Proposal

(Jacob M. Schlesinger & William Mauldin – Wall Street Journal)

The Trump administration’s chief trade negotiator plans to propose significant changes to a central aspect of the North American Free Trade Agreement, in a bid to force auto factories in Mexico to move back to the U.S., according to people briefed on the plan.

The proposal introduces a requirement that cars would need to have a specific level of U.S.-made content to qualify for tariff breaks, a step that would change a core principle of the 23-year-old regional trade pact and pit the longtime trade members against each other. Currently, cars can cross the continent’s borders duty free if they have a specified amount of content from within the NAFTA region, in keeping with the pact’s original objective of creating a more integrated continental economy.

“This would be enormous,” said Gary Hufbauer, a trade expert at the Peterson Institute for International Economics. “It’s completely anathema to the concept of a free-trade agreement where the point is to have stuff made across the whole area.” Click here to read more.