Dozens of lawmakers urge U.S. Trade Representative to reconsider rule-of-origin proposal

By Tyson Fisher, Land Line staff writer | Friday, November 17, 2017

As trilateral negotiations for the North American Free Trade Agreement enter Round 5, dozens of lawmakers in the House of Representatives are urging U.S. Trade Representative Robert Lighthizer to think twice about new, proposed rules-of-origin standards. A bipartisan letter to Lighthizer was signed by 72 representatives.

According to the letter, lawmakers are concerned that certain proposals by the Trump administration “would eliminate the competitive advantages provided to the U.S. auto industry under the current NAFTA rules.” Lawmakers also are worried that such proposals could be rejected by Canada and Mexico, potentially ending the agreement altogether.

“Either outcome would adversely affect the U.S. auto industry – reducing sales, production, and exports and harming U.S. workers in the process,” lawmakers said in the letter.

Currently, 62.5 percent of parts used to assemble vehicles in North America must come from factories on the continent, as opposed to a factory in China or elsewhere. Several reports reveal that the Trump administration wants rule of origin to increase to 85 percent. According to news release from Rep. Mark Sanford, R-S.C., such a drastic change “would fundamentally alter the very supply chains that have resulted in so much auto manufacturing coming to the United States.”

With many of the House members representing a large constituency working the motor vehicle industry, NAFTA negotiations has become a hot topic. Many members of Congress believe that NAFTA should be updated to reflect the 21st century economy.

“If the goal of renegotiating NAFTA is to ‘do no harm,’ then tightening the current rule of origin standard, which is already the highest of any trade agreement worldwide, seems like a recipe for disaster.” Rep. Sanford said in a news release. “South Carolina has certainly benefited from a more competitive auto industry, courtesy of NAFTA’s encouragement of open trade and investment. The proof is in the growth of BMW’s Spartanburg plant, Mercedes’ expansion to North Charleston, and the new Volvo plant set to open next year in Berkeley County. ”

The fifth round of NAFTA negotiations began Nov. 15 and are expected to conclude Nov. 21. Details regarding the specifics of the negotiations are mostly unknown since talks are taking place behind closed doors. The three NAFTA ministers agreed to step back this time around to provide negotiators with more time to analyze proposals and conduct internal consultations, according to a U.S. Trade Representative Office news release.

 

 

Copyright © OOIDA

Comments