Auto Industry Says it Wants U.S. to Stay in NAFTA

Earlier this month, we reported that, as part of the ongoing renegotiation of the North American Free Trade Agreement, the United States is pushing to require automakers to use more North American parts on their cars. Both Canada and Mexico objected, with the U.S. Chamber of Commerce calling the demand a “poison pill” that might derail the negotiations altogether. If a new deal can’t be reached, the U.S. administration has said it may pull out of the agreement. But if you ask the auto industry, withdrawing from NAFTA would be a terrible idea.

Reuters reports that many major automakers, suppliers, and auto dealers have formed a new coalition to urge the president not to pull the U.S. out of the deal. Called “Driving American Jobs,” the coalition represents almost every major automaker and has launched an advertising campaign to convince both voters and Washington that NAFTA is good for Americans. According to the group, ending the 23-year-old agreement would put automotive jobs in the U.S. at risk. NAFTA is responsible for approximately $1.2 trillion in annual trade between the U.S., Canada, and Mexico.

“We need you to tell your elected officials that you don’t change the game in the middle of a comeback. We’re winning with NAFTA,” says the coalition’s website.

Under the current deal, 62.5 percent or more of the materials in a vehicle have to be North American-sourced to avoid a tariff. The Trump administration would like to raise that requirement to 85 percent. It also wants to make sure that at least 50 percent of the parts in a vehicle were made in the U.S.

In a recent interview, President Trump told the Fox Business Network that he’s optimistic he’ll be able to negotiate a new agreement. But if he can’t reach an agreement he likes, there’s a good chance he’ll withdraw. “We can’t allow the world to look at us as a whipping post,” said Trump. “Not going to happen anymore.”

But the other countries in the deal haven’t given up. At a news conference with President Pena Nieto of Mexico, Canada’s Prime Minister Justin Trudeau said they were committed to achieving a “win-win-win” deal. “We will not be walking away from the table based on the proposals put forward,” Trudeau told reporters.

Source: Reuters

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