Mexican auto lobby rejects U.S. NAFTA proposal on rules of origin

MEXICO CITY (Reuters) – The Mexican Auto Industry Association (AMIA) on Thursday rejected U.S. proposals to increase North American content for autos produced in the region and require, under a new NAFTA deal, that half of all content come from the United States.

AMIA President Eduardo Solis said the rules of origin enshrined in the current North American Free Trade Agreement (NAFTA) have been key in creating value and integrating the auto industries of Canada, the United States and Mexico.

“Our position is to not touch the methodology or the rules of origin that have allowed this sector to be successful in the three countries,” Solis said at an event in Mexico City.

Under NAFTA, at least 62.5 percent of the material in a car or light truck made in the region must be from North America to be able to enter the marketplace tariff-free.

The administration of U.S. President Donald Trump has proposed raising the amount of NAFTA content in autos to 85 percent and securing 50 percent of the total for the United States.

Those demands to reserve the lion’s share of automotive manufacturing for the United States helped cast a pall over a fourth round of talks to revamp the 23-year-old accord underpinning $1.2 trillion in annual trilateral trade.

Solis called the U.S. proposal for country-specific content rules unacceptable, saying it violated World Trade Organization rules.

Global automakers including General Motors Co (N:), Ford Motor Co (N:), Fiat Chrysler Automobiles (MI:) and Volkswagen AG (DE:) all have plants in low-cost Mexico.

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