published Mar 5, 2018, 6:31:08 PM, by Josh Wingrove, Andrew Mayeda and Eric Martin
(Bloomberg) —
U.S. Trade Representative Robert Lighthizer says he’s working with the auto sector to try and find a breakthrough on automotive rules of origin, one of the biggest sticking points in Nafta negotiations.

The seventh round of Nafta talks wrapped up Monday in Mexico City, with the threat of potential steel and aluminum tariffs overshadowing progress on parts of the 24-year-old trade deal between the U.S., Canada and Mexico.

Lighthizer, speaking to journalists Monday, said U.S. negotiators are talking with the auto sector “to work out something that’s in everyone’s interests.” The lead U.S. Nafta negotiator on the issue was recalled to Washington last week at the start of talks.

“It’s clear that autos are a huge part of the problem and you have to rebalance in that area, and we’re trying to do that in a sensible way,” that works for companies and all three countries, Lighthizer said. He later added, when asked about U.S. Nafta demands: “Of course the United States is willing to compromise.”

The talks between the U.S. government and its auto sector were important enough to delay a Mexican counter-proposal on the subject. Mexican Economy Minister Ildefonso Guajardo said Mexico was ready to put its position on automotive rules of origin on the table at the round that just ended in Mexico City but decided to wait to see the results of U.S. dialogue with its industry.

“Without a doubt, that will be important in the final conversation about rules of origin,” Guajardo said Monday.

In a bid to “rebalance” Nafta and boost U.S. manufacturing, the U.S. wants to require that 85 percent of a typical car be built within Nafta to be traded under the pact, up from the current 62.5 percent, and add a U.S.-specific requirement of 50 percent, while also rewriting what products’ origin is tracked.

Lighthizer’s counterparts have pushed back. Canada’s chief Nafta negotiator, Steve Verheul, has said the proposal “would drive production offshore,” while Guajardo has said any solution on the dispute over cars would include a higher Nafta content requirement.

To contact the reporters on this story: Josh Wingrove in Mexico City at jwingrove4@bloomberg.net ;Andrew Mayeda in Mexico City at amayeda@bloomberg.net ;Eric Martin in Mexico City at emartin21@bloomberg.net To contact the editors responsible for this story: Sarah McGregor at smcgregor5@bloomberg.net Robert Jameson
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