The Globe and Mail reports in its Thursday, Jan. 19, edition that
renegotiation of the North
American free-trade agreement is
at the top of the incoming Trump administration's agenda, and restructuring
how the trade deal
applies to the auto sector is
expected to be a critical part of
the talks.
The Globe's Greg Keenan writes that the rules of origin
under NAFTA are a key focus
for the United States. Those rules,
which are particularly prominent
and in the automotive sections of
the agreement, stipulate that 62.5
per cent of a vehicle contain
North American content in order
to qualify for duty-free access to
each of the countries.
That content could come from
all three countries or any single
country, although in practice all
vehicles have a mix of parts originating
in the U.S., Canada
and Mexico.
Setting a minimum threshold
for U.S. content in vehicles -- suggestions
are that the U.S. could demand 25 per cent
or 33 per cent -- and raising the
overall North American content
requirement to 75 per cent,
would likely lead to more auto-parts
plants locating in the U.S., meeting president-elect Donald Trump's
goal of increasing U.S. manufacturing
jobs.
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