Chief Canadian NAFTA negotiator not expecting progress on auto content rules
24 September, 2017, 00:54 | Author: Manuel Hopkins
Seeking to bolster its case for tougher rules of origin in the North American Free Trade Agreement, the Trump administration released a new study on Friday that shows US value-added content is declining for manufactured goods imported from Mexico and Canada.
"Perhaps these negotiations would be frozen for the next year as we have these political developments in the United States and Mexico", he said.
An agreement that would see Mexico sign on to a NAFTA clause governing oil exports may be one of the first significant products of the renegotiation talks this weekend in Ottawa.
Since U.S. President Donald Trump has repeatedly attacked NAFTA and threatened to tear up the agreement, Mexico has pushed to secure more access to the European Union, Brazil, Israel, Singapore, Australia and New Zealand.
During the same appearance, Ross said President Trump's administration doesn't want to "unnecessarily irritate" Congress with trade concerns as the legislative arm of the federal government works to achieve tax reform. By the time Mexico's tariffs on US goods were eliminated in 2008, USA agricultural exports had increased by more than $15 billion and generated well over 100,000 jobs - $5 billion and nearly 50,000 jobs more than projected. "That is going to change under President [Donald] Trump, and rules of origin are just the beginning".
Auto-industry officials estimate that there is between 60 per cent and 70 per cent US content in Canadian-assembled vehicles.
When NAFTA was negotiated in 1994, it lowered trade barriers and allowed more-or-less free-flowing trade across North America's borders.
Another potential source of conflict between Canada and the U.S.in these talks is Canada's "real red line": Chapter 19, the dispute resolution mechanism.
The local Council of Canadians chapter wants an end to an agreement that it says is killing jobs and depressing wages for workers in Canada, Mexico and the U.S.
Before the free trade agreement (FTA) with Australia took effect in 2005, Iowa State University economist Dermot Hayes estimated that US pork exports "Down Under" would increase from $10.6 million to more than $60 million annually. Critics have said that could add $5,000 to $15,000 to the price of a auto in the U.S.
A second government official, speaking on background, says talks at this point are where Canadian negotiators had anticipated.
Céline Bak, a senior fellow at the Centre for International Governance Innovation's Global Economy Program, said she expects to see progress on key issues during the third round of talks in Ottawa, such as rules of origin and the integration of new labour and environment standards into the deal.
"I think there has to be because you can't keep on going and not doing anything". "Thousands of American factory workers have lost their jobs because of these provisions". Prime Minister Justin Trudeau has made clear that Canada would walk away from the talks if the Americans insist on scrapping this provision.
The United States imports products because the American economy is consumption-driven, and consumers demand them. But he doesn't think that Trump needs to look quite so far south to find a place that's undercutting American workers: In 28 US states, so-called "right-to-work" laws inhibit the ability of workers to unionize, thereby holding down wages, and encouraging companies in America's other 22 states to ship jobs across our nation's (internal) borders.
In a paper published Thursday, Scotiabank Economics argues that there is no need to tighten rules of origin for the auto sector; more than 75 per cent of vehicle parts are already made in North America.
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