A Canadian business group has told the Trump administration that it wants no change in the North American Free Trade Agreement’s “rules of origin,” which allow products to be seen as “Made in America” if just 62.5 percent of its components come from there.
The rules are expected to be challenged by the White House when negotiations between the U.S., Canada and Mexico start, likely in August. But the Business Council of Canada, which represents many of the country’s largest corporations, warned against any dramatic changes in a filing with the U.S. Trade Representative’s Office on Monday.
“NAFTA’s rules of origin could use an update. However, we urge negotiators to proceed carefully to avoid unintended consequences when making changes,” the group wrote. “Alterations that lead to country specific rules would be devastating to industry in all three member states.”
June 12 is the deadline for interested parties to submit comments to the office for review prior to the official opening of renegotiations.
Adjusting NAFTA’s rules of origin is likely to a major issue at those talks. The rules are particularly important to automakers, who use supply chains spread across all three member countries. “We would argue that the current requirements are the highest of any free trade agreement in the world. We would argue that it has done its job,” Matt Blunt, president of the American Automotive Policy Council, told the Washington Examiner.
The rules have numerous critics, though, who argue they allow consumers to think they are supporting domestic businesses when key parts are actually made elsewhere. President Trump has called for reviving “buy American” policies and Commerce Secretary Wilbur Ross has said the rules could use some “tightening.” Labor groups are also pushing for higher standards as well.
