By Jamie Barrie I t was no surprise to either the Canadian or Mexican gov- ernments when the United States entered into renego- tiations with both countries about NAFTA that the auto industry would take centre stage as talks opened in a Wash- ington hotel ballroom with flags from each nation lined up behind the ministers and chief negotiators let they were entering into an Olympic event. The initial days of the NAFTA negotiations have prompted lots of public debate between involved countries after remarks from U.S. official were interpreted as a “Made in America” quota being part of the new deal. If did not take long for both Canada and Mexico to share their feelings about any kind of idea or clause of an American-made quota in the new agreement for the auto manufacturing industry. Lead ministers from both Canada and Mexico warning of the damaging consequenc- es this would have for the auto industry in all three countries. Canadian Foreign Affairs Minister, Chrystia Freeland saying, “Canada is not in favour of specific national content in rules of origin.”And Mexico’s economy minister, Ildelfonso Guajardo, saying said the follow about proposed changes, “It’s not good for American companies, it’s not good for Mexican companies. So I think we should find other policy tools.” U.S Trade Representative, Robert Lighthizer pointed to the loss of jobs in the US manufacturing sector as the reason so many Americans view NAFTA as a failed agreement, saying
“Thousands of American factory workers have lost their jobs because of these provisions.,” Lighthizer, cited the priori- ties for the sector, designed to boost production of parts in North America, and in the United States. Industry leaders are cautioning Lighthizer to handle this matter with care as any wrong move could have major impacts on the auto industry and could even lead to a jump in vehicle prices, which would not be good for the industry regardless of which country you are from or manufacture in. Changes do run the risk of making North American producers less competitive, or even force them to just ignore the new rules and simply pay a tariff that would be passed along to consumers. Auto-parts makers from all three countries have also warned officials in the NAFTA negotiations about the risks to the indus- try’s integrated supply chain if changes to NAFTA make it harder to ship parts across the continent’s borders. In a response to opening talks, Guajardo said, “The good part of this is that we initiated the dialogue,” Guajardo went on to say, “Eventually we’ll start closing some of the differ- ences that we have.” We will see what happens with the next round of talks as the three countries head to Mexico for the next series of negotiations toward a new NAFTA agreement.
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SPOTLIGHT ON BUSINESS MAGAZINE • AUGUST 2017
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