OTTAWA : American trade officials are showing newfound interest in a Canadian proposal for revamping NAFTA’s automotive provisions as the U.S. seeks to swiftly conclude renegotiations of the continental free trade pact.
And that’s being taken in some quarters as a sign that the U.S. may realize it will have to settle for making only modest progress on a handful of American demands if there’s to be any hope of concluding a deal within the next few weeks.
That would mean reaching a deal with Canada and Mexico during or very soon after the next round of talks, which have not yet been officially scheduled but are expected to start on April 8 in Washington and last at least 10 days.
Canadian government officials are privately skeptical that a deal can be concluded at such a breakneck pace, particularly since Mexico’s presidential campaign officially kicks off at the end of this month and no candidate can afford to be perceived as conceding anything to U.S. President Donald Trump, who is political kryptonite in that country.
They believe the only way it can happen is if the U.S. drops many of its controversial demands and accepts modest changes in just a few key areas — in particular on automobiles, which Canadian officials have believed from the outset would be the key to a successful renegotiation.
In the meeting, Volpe said the Americans reiterated their opening demand — that vehicles must have 85 per cent North American content and 50 per cent American content to be eligible for duty-free movement across the three countries, up from the current NAFTA requirement of 62.5 per cent North American content — which has been rejected as a non-starter by Canada, Mexico and the industry.
But he said they were also “intellectually curious” about Canada’s counter-proposal.
Canada has proposed that NAFTA’s list of traceable components that go into cars and trucks be updated to include not just things like steel, aluminum and plastics but also intellectual property — like the software behind the computerized parts that are now integral to most vehicles and destined to become even more so as the industry embarks on an era of self-driving automobiles.
