Wednesday, October 18, 2017

U.S. tables NAFTA's 'poison pill' with auto sector demands

American negotiators formally present changes to trade deal’s auto sector rules

By Katie Simpson, CBC News
Posted: Oct 13, 2017 10:34 AM ET
Last Updated: Oct 13, 2017 10:48 AM ET

The United States’s NAFTA negotiating team has formally presented its proposed changes to the auto sector, starting what’s likely to be the most contentious rounds of renegotiations, CBC News has learned.

A source with direct knowledge of the talks says the Americans unveiled Friday their protectionist requests that would boost the overall North American content requirements from 62.5 per cent to 85 per cent.

The changes would apply to automobiles, trucks and large automobile parts.

A source told CBC the changes would be phased in gradually.

But the Americans also want a country-specific change that would increase U.S. content requirements to 50 per cent in the first year of the new deal.

Sources close to the talks have told CBC News that Canada views the proposal as a “non-starter.” 

The proposals have been presented, but not yet discussed.

Both demands would upend the current automotive sector, with the proposal being described by industry analysts as a “poison pill” for the trade agreement.

Tom Donohue, who heads the U.S. Chamber of Commerce, has pointed to a number of “unnecessary and unacceptable …. poison-pill proposals” from the Trump administration.

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