The CEO of the Windsor Essex Economic Development Corporation says American demands could be bad news for the local auto industry.
In the ongoing NAFTA negotiations, the United States wants a specific threshold set for U.S. content in vehicles.
A source with direct knowledge of the talks told Katie Simpson from CBC News that the Americans unveiled protectionist requests Friday 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 also 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.
Stephen MacKenzie from WEEDC says changing the rules of origin could mean higher costs for consumers
"The industry has a choice: if you try to enforce these quotas, these percentages, these rules of origin, you are going to increase the cost to the consumers," he said. "Studies have shown that there's about a six per cent tolerance in the rise of a price of a vehicle before the companies will say, 'Look, we we need to go to a lower-cost location altogether."
The latest round of trade talks is expected to wrap up later this week.