President Donald Trump's trade negotiators entered the latest round of NAFTA talks Wednesday under growing pressure inside their own country to step back from a confrontational stance that's left the US isolated at the negotiating table.
The trade negotiations this week in Washington have gotten off to a rocky start, with the U.S. Chamber of Commerce warning that the Trump administration might be sabotaging the talks with unrealistic proposals.
People briefed on USA proposals to be presented this week said Washington is seeking to sharply lift North American content threshold in auto manufacturing.
He and Mexican Economy Minister Ildefonso Guajardo Villarreal and Canadian Foreign Minister Chrystia Freeland are expected to make a joint appearance. Mexico strongly opposes such a move, which would damage its own auto industry.
But US Trade Representative spokesman Emily Davis hit back, saying: "The President has been clear that Nafta has been a disaster for many Americans, and achieving his objectives requires substantial change". Those include United States demands to adjust the rules of origin, which would increase the percentage of the content of vehicle parts and other materials that would come from NAFTA countries in order for a good to qualify as duty free - a specific concern for the North American auto industry. It's the second topic to be agreed on along with the chapter on small and medium-size businesses.
Further, "attempts by Boeing to put tens of thousands of aerospace workers out of work across Canada is not something we look on positively".
Higgins serves as vice-ranking member on the House Committee on Ways and Means, where he also serves as a member of the subcommittee on trade. "When North America wins, America wins, and the American people win as well", he said. "Starting to play with a non-market economy would be awful for us". Representatives of the auto industry warned some of the US demands could raise prices for vehicles.
The proposals call for North American content, overall, to rise to 85 percent from the current 62.5 percent.
The hard issue of rules of origin will be addressed mostly at the end of the current talks, according to a schedule obtained by Reuters.
As many as 50,000 workers at auto parts suppliers could lose their jobs due to increased tariffs if the US pulls out of the North American Free Trade Agreement, according to a study released Thursday by the Motor and Equipment Manufacturers Association, which lobbies for suppliers in Washington. Chief Executive Officer Don Walker said in an interview ahead of the talks.
U.S. President Donald Trump has repeatedly threatened to exit the pact if he can't get more favorable terms.
Business and farm groups say abandoning the 23-year-old pact would wreak economic havoc, disrupting cross-border manufacturing supply chains and slapping high tariffs on agricultural products.
The rules of origin demands are among several conditions that the U.S. Chamber of Commerce has labelled "poison pill proposals" that threaten to torpedo the talks.
Britain could join a formal trade alliance with the United States, Canada and Mexico if the European Union refuses to clinch a post-Brexit trade deal, the Daily Telegraph newspaper reported on Tuesday.
Without NAFTA, Mexico trade experts say US products would face higher tariffs to enter Mexico, which could further skew the trade balance. Bombardier is a significant employer in Northern Ireland and Canada.
"What is the administration going to do?"
He said content rules for auto parts were still negotiable, despite shock in Mexico at suggestions half of all parts in cars should be made in the United States. "Now we need to blow this up?'"