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

The U.S.'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.

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

Under NAFTA's current rules of origin, vehicles must have at least 62.5 per cent North American content to qualify for duty-free movement between Canada, the U.S. and Mexico. (The Canadian Press)

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.

About the Author

Katie Simpson

Politics

Katie Simpson is a senior reporter in the Parliamentary Bureau of CBC News. Prior to joining the CBC, she spent nearly a decade in Toronto covering local and provincial issues.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.