Foreign automakers oppose Trump NAFTA plan as US-Mexico talks resume

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Foreign-brand automakers with US plants do not support Trump administration rules to raise the amount of local content in North American-made vehicles, a group representing companies including Toyota Motor Corp., Volkswagen AG and Hyundai Motor Co. has told key US lawmakers.

Talks between Mexican Economy Minister Ildefonso Guajardo and US Trade Representative Robert Lighthizer are due to resume on Tuesday in Washington to try to resolve remaining bilateral issues so that Canada, which has been sidelined for weeks from the negotiations, can return to the bargaining table.

The automakers’ position was in a previously unreported Aug. 16 letter from their “Here for America” group to top trade-focused members of Congress. The letter could raise resistance to a revamped North American Free Trade Agreement from lawmakers in southern states, where foreign manufacturers have built auto plants.

“We remain concerned that, without further clarifications, assurances and modifications, many of those companies producing vehicles in multiple states will not be in a position to support legislation implementing a NAFTA 2.0,” the group said in the letter, signed by John Bozzella, president of the Association of Global Automakers.

Automotive experts have said that some foreign brand automakers with smaller North American manufacturing footprints and fewer US research and development staff may have difficulty meeting the more stringent content requirements for years.

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The group said its members, which also include Honda Motor Co. Ltd., Daimler, BMW , Nissan Motor Co. Ltd. Kia Motors, Subaru Corp., and Volvo, a unit of China’s Geely Automobile Holdings, account for nearly 50 percent of US vehicle production.

At the same time, the American Automotive Policy Council, which represents Detroit’s Big Three automakers is “encouraged by the direction of the discussions,” said Matt Blunt, who heads the trade group.

“We share the administration’s overall goals of strengthening US auto manufacturing and creating jobs and given the importance of NAFTA to US industry we urge the negotiators to quickly complete the negotiations,” added Blunt, whose group represents General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles .

The United States and Mexico are closing in on a bilateral deal on autos that would lift the requirement for North American content in regionally made vehicles to at least 70 percent from the current 62.5 percent.

The deal is expected to require that some 40 percent of the value come from high wage locations paying at least 16 US dollars an hour, meaning the United States and Canada, a Mexican source close to the talks told Reuters.

Source(s): Reuters