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Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Thursday November 23, 2017

U.S. NAFTA auto proposal faces criticism from Canada and Mexico 

The United States negotiating team found itself squeezed at home and abroad during NAFTA talks on Monday, with various actors from Canada, Mexico and within the U.S. pressing it to reconsider demands called unworkable and unworthy of serious bargaining.

The Canadian and Mexican governments have refused to produce a counterproposal at the current round of talks on auto policy and are instead delivering a presentation on the self-inflicted damage they claim it would wreak upon America.

Their case was bolstered within the U.S. Senate.

A major auto association told a hearing that the current proposal could induce companies to leave this continent and simply pay import tariffs. This was on the same day that 18 U.S. senators sent a letter demanding the administration conduct an economic analysis before making any changes to NAFTA.

The U.S. stunned its partners by demanding that car companies quickly transform their supply chains to boost North American content; ensure half of a car’s parts come from the U.S.; use a new, stricter formula for calculating the origins of a car’s components; and do it all within a year.

“No vehicle produced today could meet such an onerous standard,” the Senate hearing was told by the Alliance of Automobile Manufacturers.

“This proposal is unprecedented and would have significant ramifications on our industry and the U.S. economy, as a whole.”

The U.S. negotiating team is urging people to tone down the rhetoric.

It apparently views such proposals as a starting point. An American source familiar with the talks pointed to evidence of the U.S. willingness to negotiate in good faith: the very broadly phrased list of American objectives published online last week.

In a few cases, that list includes specific numbers — like the demand that Canada relax its duties on online purchases by $780. In the case of automobiles, though, there are no numbers — just a reference to a desire for U.S. content in cars.

The source said this is normal in negotiating. But what’s less normal, the source said, is the public rhetoric by the Canadian side, with talk of red-lines and non-starters that will make it harder to advance negotiations.

The Canadians adopted a deliberate strategy at this round of proposing nothing on the hardest issues.

Instead, they will deliver a presentation and demand details. Along with Mexico, Canada will press the American side for clarity on how the auto proposal would work, with the subtext of that conversation being their belief that the proposal would not, in fact, work at all. (Source: Toronto Star) 

 

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