Auto suppliers fear job losses if United States quits NAFTA

STEPHEN CROWLEY  NYT

Finance Minister Bill Morneau, in Washington for meetings with G20 finance ministers and the International Monetary Fund, was confronted Thursday with several questions about a possible USA exit from NAFTA.

"Let me be forceful and direct", Tom Donohue, president of the US Chamber of Commerce, said earlier this week.

"With an agreement, in 10 years I see a strong region that can face Asia or China, without an agreement I see a weaker region in the medium and long term".

The trade negotiations this week in Washington have gotten off to a rocky start, with the U.S. Chamber of Commerce warning that the Trump administration might be sabotaging the talks with unrealistic proposals. "Withdrawing from the agreement also risks a prolonged legal fight over whether the president can exit from the agreement without congressional consent".

He said content rules for auto parts were still negotiable, despite shock in Mexico at suggestions half of all parts in cars should be made in the United States.

"We are all much worse off with a bad agreement than with no (NAFTA)", said Guillermo Vogel, who co-chaired the Mexico City event and is a vice president at Tenaris, a steel company. The US president has made revamping the trade pact with its neighbors and reducing the country's trade deficit a pillar of his nationalist economic agenda.

"So saying, we are ready for anything and we will continue to work diligently to protect Canadian interests, to stand up for jobs, and look for opportunities for Canadian business and citizens of all of our friends and neighbour countries to do well".

Trudeau's visit to Mexico is his first official sojourn to the country and follows Pena Nieto's visit to Canada in June 2016.

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The figure is dwarfed by their trade with the United States: more than $480 billion past year for Mexico and more than $540 billion for Canada. Mexico strongly opposes such a move, which would damage its own vehicle industry.

The U.S.is expected to propose substantially raising the regional requirement, from 62.5 percent now, and potentially add a U.S. -specific content requirement. Scheduled talks in this session have been extended by two days to Tuesday.

The hard issue of rules of origin will be addressed mostly at the end of the current talks, according to a schedule obtained by Reuters.

"In terms of trade, the USA sells more to Canada than it does to China, Japan and the United Kingdom combined".

Higgins serves as vice-ranking member on the House Committee on Ways and Means, where he also serves as a member of the subcommittee on trade.

Despite clear signs of impatience from Canada in particular, US negotiators have yet to submit their proposal on rules of origin for the auto sector.

"There will always be challenges that come up that we can thoughtfully work through", he told the lawmakers. Comments this week by the two senior Mexican ministers handling the NAFTA file suggest a growing acceptance that Mexico may have to go it alone on trade.

Mexican Foreign Minister Luis Videgaray warned that an end to NAFTA would mark a breaking point in U.S.

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