U.S. government drops demand for U.S. auto content in NAFTA negotiations

With this bone of contention being amicably resolved, NAFTA negotiations can continue.

Two leading newspapers, The Mail and The Globe, have reported citing sources, that the U.S. government has dropped its demand all vehicles manufactured in Canada and Mexico for the purpose of exporting to the United States contain at least 50% U.S. content.

Last week, the U.S. administration had dropped this demand during the North American Free Trade Agreement (NAFTA) negotiations in Washington which included talks between U.S. Trade Representative Robert Lighthizer with Canadian Foreign Minister Chrystia Freeland.

Earlier this week, Canadian Prime Minister Justin Trudeau had stated Trump appeared to be “enthusiastic” about coming to an agreement on NAFTA.

The quotas for U.S. content in autos have been a major bone of contention for the Canadian and Mexican governments since it would significantly impact their economies.

The U.S. administration under Donald Trump had been seeking to raise the U.S. content in automobiles for export to the U.S. to 85%, from 62.5%.

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