(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.
- Mexico Warns U.S. Against ’Protectionist War,’ Peso Weakens (Reuters)
- Canada Nervous About U.S. NAFTA Proposal on Auto Content (CP)