NAFTA auto rules of origin talks bog down, says Mexican expert

Source:Xinhua Published: 2018/6/13 11:37:53

Talks to update automobile rules of origin as part of the renegotiation of the North American Free Trade Agreement (NAFTA) bogged down, a Mexican expert said on Tuesday.

"There is no agreement on the rules of origin, there has been no meeting, there has been no movement," said Eduardo Solis, the president of the Mexican Automobile Industry Association (AMIA).

"At this moment, the NAFTA negotiations are not moving," he told a press conference.

While the three NAFTA partners -- Mexico, Canada and the United States -- have made headway in many other aspects of the trade deal, there has been no consensus on the rules that cap the amount of foreign-made parts for a vehicle made in North America and eligible for preferential tariffs, he said.

Canada and Mexico want to keep the current rules in place. The deal signed in 1994 calls for 62.5 percent of a vehicle to be made in NAFTA territory. Yet the United States wants to raise that figure to 85 percent.

Solis also criticized the White House for invoking national security concerns as a reason to impose tariffs on imported cars and metals, saying there was a "latent threat" in the measure.

The strategy aims "to impose trade barriers pure and simple, without justification," said Solis.

The AMIA released its latest industry figures at the press conference, reporting vehicle production rose 3.9 percent in May year-on-year, reaching a record high of 352,860 units.

Exports, however, fell 6.9 percent in May to 250,542 vehicles, not counting Japanese-owned Nissan, which has not released its production figures since April.

Mexico exports a large part of its automobile output to the United States, its biggest trade partner.

Talks on renegotiating NAFTA began in August 2017 as Trump threatened to withdraw from the 23-year-old trade deal. The three countries remain divided over the rules of origin for automobiles and other issues following months-long renegotiations.

Posted in: ECONOMY

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