U.S. softens stance on auto demand in NAFTA negotiations

WASHINGTON – The United States has softened another one of its key NAFTA demands, shaving 10 per cent off a request on automobiles amid a flurry of talks aimed at getting a preliminary agreement this spring.

The U.S. has watered down its demand that cars include 85 per cent North American content to avoid a tariff – and lowered the number to 75 per cent.

That’s after it already dropped a demand that every car include 50 per cent U.S. content.

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The new U.S. position is that auto companies receive credits toward the 75 per cent threshold for certain behaviours, like paying higher salaries, which is designed to benefit production outside Mexico.

But other issues are far from settled.

Amid a U.S. push for some sort of agreement this spring, negotiating teams are meeting in Washington this week. The most recent version of the schedule obtained by The Canadian Press shows agriculture is up for discussion this week, but not dispute resolution.

Plans for some sort of announcement this week at the Summit of the Americas have been dropped: First, President Donald Trump cancelled his attendance and now his trade czar Robert Lighthizer has announced he’s not attending.

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Trump insisted Thursday he’s in no hurry.

“We’re getting pretty close to a deal,” he told reporters at the White House.

“It could be two weeks, it could be three months, it could be five months, I don’t care. … I have no timeline. … I keep reading from the fake news media that we’re pushing it, we’re not pushing it…There’s no timeline.”

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He made the remarks next to Lighthizer – who has publicly said he needs a deal within weeks if there’s to be any hope of getting it adopted by the outgoing Mexican and ratified this year by the current U.S. Congress, which faces midterm elections.

The U.S. even imposed a May 1 deadline on Canada and Mexico to negotiate an exemption on steel tariffs, and tied it to NAFTA.

Now Trump says there’s no rush. In fact, he says delay suits him just fine, too, because the uncertainty about trade is prompting investors to steer capital to the U.S from Mexico.

“Nobody is moving into Mexico. As long as NAFTA is in flux no company is going to spend $1 billion to build an automobile plant (there). I told the Mexicans we can negotiate forever, as long as we have this negotiation going nobody is going to build $1 billion automobile plants (in Mexico),” he said.

Lighthizer concurred with his view of the timeline: “No hurry on NAFTA but making good progress.”