Top US automakers warn Pence: NAFTA proposal could hurt industry

The top U.S. automakers warned Vice President Pence on Monday that the administration’s proposal to rework the North American Free Trade Agreement (NAFTA) could hurt the nation’s auto industry.

In a meeting at the White House, leaders from Ford, General Motors and Fiat Chrysler sat down with Pence to continue discussions about “the future of NAFTA and the U.S. auto industry.”

The next round of talks over the 23-year-old trade agreement will take place in Washington starting on Dec. 11. One of the major sticking points in the negotiations has been the Trump administration’s proposal regarding the rules of origin for automobiles.

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“We appreciate Vice President Pence taking the time to meet us. … We also appreciate the opportunity to directly address the industry’s concerns with the administration’s rule of origin proposal,” said Matt Blunt, president of the American Automotive Policy Council, which represents the trio of automakers.

“We view the modernization of NAFTA as an important opportunity to update the 23-year-old agreement and set the stage for an expansion of U.S. auto exports,” he said.

Currently, automobiles are required to have 62.5 percent of its materials made in one of the three NAFTA countries in order to receive preferential tariff treatment under the trade agreement.

Trump wants to raise those content requirements to 85 percent and ensure that half of a vehicle’s total content is from the U.S. The administration argues that the new content rules are necessary because of the significant trade deficit with Mexico.

But the auto industry has been pushing back heavily against the proposed changes, saying it could hurt auto manufacturing and urging the White House to keep the current rules in place.

So far, the Trump administration has shown no signs of budging. Mexico’s economy minister said after the previous round of talks that Mexico would be making a “countersuggestion” on the auto proposal, according to Reuters.