Seventh round of NAFTA talks kick off in Mexico City

Officials will meet in Mexico City today where they will begin the seventh round of NAFTA renegotiations.

Although the US, Canada, and Mexico have been in discussions on how to revamp the treaty for more than six months, a finished deal is still a long way off. This is despite a supposed breakthrough in the last round of talks and many negotiators’ cautious optimism.

One of the most contentious issues discussed this week will be automobile rules of origin. The debate centres on increasing the percentage of the net cost of imported vehicles which must originate in the three countries from 62.5% to 85%. Additionally, President Trump wants half of a vehicle’s components to come from the US.

Although both Canada and Mexico seem willing to negotiate, finding a mutually satisfactory agreement will require officials to explore other options such as calculating research expenses into a vehicle’s cost — a proposal rejected by the US last month. Therefore, despite rising pressure to seal the deal, it is unclear when an agreement will be reached.

Delve deeper: NAFTA renegotiations: US protectionism writ large

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