Napolitano has hopes for NAFTA talks, despite US-Mexico climate


On the campaign trail past year, Trump said he would end the trade pact with Canada and Mexico and slap a 10 percent to 35 percent tariff on vehicles and parts made in Mexico that are imported into the US if the NAFTA renegotiation is not a success.

"This is a political negotiation and Trump is in charge, so yes we have to be very tired of that", said Ambrose in an interview with Evan Solomon, host of CTV's Question Period.

Another reason is that the rules include a concept called substantial transformation, which means that if further processing of a non-NAFTA item is done by a NAFTA partner, the non-NAFTA items are "transformed" and are deemed to have been produced in the United States, Canada or Mexico.

Under NAFTA's current rules of origin, vehicles must have at least 62.5 per cent North American content to qualify for duty-free movement between Canada, the USA and Mexico.

However, U.S. President Donald Trump's high-profile running commentary and politicking over NAFTA would likely insulate members of Congress and the Senate from NAFTA as an election issue, he added.

"In the auto sector alone, the USA has a $68 billion deficit with Mexico", said Lighthizer. "That is going to change under President [Donald] Trump, and rules of origin are just the beginning".

During the recent expansion, US employment in the sector has increased by more than five times the rate of overall manufacturing employment growth and three times the pace of total economy-wide employment gains.

The North American Free Trade Agreement, when enacted in 1994, created the world's largest free trade area, encompassing 450 million people and a gross domestic product of more than $20 trillion.

All speakers at the event agreed that an amended NAFTA will better serve the U.S., Mexico and Canada than walking away from the deal - as Trump has threatened he might do if he is not satisfied. Mexico's position, as expressed by Mr. Smith, is that Mexico welcomes the process as an opportunity to update NAFTA and modernize the document to reflect the economic changes that both the USA and Mexico have experienced over the past 23 years.

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"Unifor is changing the labour movement, not just in Canada, but the USA too", he said.

The Commerce Department analysis of recently released OECD trade in value-added data found that US content in automotive imports from Mexico declined to 18.1 percent in 2011 from 26.5 percent in 1995.

Canadian negotiators have been waiting since the first round of talks in August for the United States to submit the country's negotiating demands. "So rules of origin will just to go to Mexico unless we fix the Mexican problem".

Mr. Smith indicated that economic conditions for both the US and Mexico have changed substantially since the implementation of NAFTA, and the while each country is expected to look after its own interests in the modernization process, the renegotiations can and should result in a "win/win" for both countries.

As negotiators sit down, a survey by the Angus Reid Institute shows that Canadians' top priority in the talks is to ensure labour standards are equal across all three countries.

The numbers for the automobile industry specifically are similar - not surprising because automobiles account for 27 percent of total imports from Canada and Mexico.

The Dearborn Democrat also wants to challenge foreign governments that purposely weaken the USA dollar in a bid to boost profits for their nations' industries.

"I think it's important that Canadians aren't naive and thinking we are going into these talks...with a partner on the other side of the table that is pro free-trade, perhaps not even pro fair-trade", said Ambrose.