Daily Management Review

Mexican Expert Claims NAFTA Negotiations Bogged Down By Auto Rules Of Origin


06/15/2018




Mexican Expert Claims NAFTA Negotiations Bogged Down By Auto Rules Of Origin
According to reports in the Mexican media., there has been a slow down in the talks between the United States, Mexico and Canada on the North American Free Trade Agreement (NAFTA) deal because of disagreements in the negotiations to update automobile rules of origin which is one of the demands that have bene pressed by the U.S.
 
"There is no agreement on the rules of origin, there has been no meeting, there has been no movement," Eduardo Solis, the president of the Mexican Automobile Industry Association (AMIA) told the media.
 
"At this moment, the NAFTA negotiations are not moving," he said at a press conference.
 
Despite that fact that trade representative from three Nafta countries - Mexico, Canada and the United States, have bene able to come to an agreement on a number of issues in the trade pact, the countries are apparently far from coming to a consensus agreement on the issue of changing of the rules that put a cap on the amount of foreign-made parts that is required for vehicle made in North America and would be eligible for preferential tariffs, said Solis.
 
Canada and Mexico are demanding that the current rules are maintain\ed as they are while the U.S. wants changes made in them to suit its local domestic manufacturers. According to the present Nafta agreement – which was brought into force in 1994, makes it mandatory to source at least 62.5 per cent of a vehicle and its construction in the Nafta territory. The demand of the United States is to increase that figure to 85 percent.
 
The U.S. government was also criticized by Solis for using the notion of concerns over national security as a pretext for imposition of tariffs on import of cars and metals and said the measures carried a "latent threat".
 
The strategy aims "to impose trade barriers pure and simple, without justification," said Solis.
 
The AMIA have recently claimed at that press conference that there has been an increase noted in the latest industry figures where production numbers had risen by 3.9 per cent in May year-on-year with a record number of vehicles produced at 352,860 units.
 
There has however been a fall in the exports by 6.9 percent in May in the same period to touch 250,542 vehicles excluding the numbers of the Japanese-owned Nissan hat is yet to release its production figures since April.
 
A large part of its automobile output is exported to the U.S. by Mexico and the U.S> is the largest trading partner of the country.
 
Following the threat by Trump to with draw from the Nafta agreement citing unfair trade policies in the deal, negotiations on restructuring the deal started in August 2017. And despite months-long discussions the three parties have not been able to come to an agreement with respect to the rules of origin for automobiles and other issues.
 
(Source:www.xinhuanet.com)






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