Trump Downplays May as NAFTA Deal Target
President Donald Trump told reporters at the White House that NAFTA negotiations are going great, and while he also said "we're pretty close to a deal," he dismissed talk that the U.S. is pushing to reach a tentative agreement in early May. "It could be three or four weeks, it could be two months it could be five months, I don’t care,” Bloomberg quoted him saying on April 12. “So the narrative of I’m pushing for a deal -- I never push for a deal. I don’t care. In fact, if everybody in this room closed their ears I’d say that I’d rather terminate NAFTA and do a brand new deal but I’m not going to do that because I’d rather everybody to be happy in this room, okay?"
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The U.S. Trade Representative Robert Lighthizer is no longer planning to go to Peru at the end of the week, where he could have held talks with his Mexican and Canadian counterparts. A spokeswoman for his office did not answer a question on when the ministers and USTR will meet again.
Trump was meeting April 12 with free trade advocates in Congress, and spoke before the meeting began. He also suggested that a slower negotiation benefits the U.S. "In the meantime nobody is moving into Mexico -- as long as NAFTA is in flux, no company is going to spend a billion dollars to build an automobile plant, I told the Mexicans we can negotiate forever, as long as we have this negotiation going nobody is going to build billion-dollar automobile plants," he told reporters.
One of the thorniest aspects of the negotiation is changing the rules of origin for automobiles. According to a report from Inside U.S. Trade, Lighthizer has refined his proposal to a 75 percent North American content requirement for core components, 70 percent for second tier and 65 percent for third tier, with a 25 percent credit for parts or assembly jobs that paid at least $15 an hour. Ann Wilson, senior vice president for government affairs at the Motor and Equipment Manufacturers Association, declined to confirm those figures, but said, "the discussions are going in the right direction." Wilson told International Trade Today that "we are very heartened" by what USTR is sharing with her organization on rules of origin. But, she said, his proposed transition period of three years is not long enough. Auto parts manufacturers need more than five years to open new forging facilities or other plants, she said.
Scott Paul, president of the Alliance for American Manufacturing, said a 75 percent content requirement "is not that much of a stretch" for automakers, because he said he understand most build in some leeway past the current 62.5 percent regional value content requirement on major components. "I think any upward movement through the rules of origin is positive," he said, though he has not seen the details. He does not find the argument that current vehicles cannot meet the standard a persuasive one, since the goal is to do more manufacturing here. "I do think we should set an ambitious, but achievable goal," he said.