The study, released as NAFTA negotiators from the U.S., Canada and Mexico meet in the Washington, D.C. suburbs, found that a 35 percent tariff that would be placed on auto parts that are made in the U.S. and shipped to Canada or Mexico without the trade agreement's duty-free treatment would result in a job loss of 25,000 to 50,000 in the parts supplier industry.
Victor Herrera, who's spent 35 years covering Latin American financial markets, warns that NAFTA's demise would have major effects. President Donald Trump has threatened recently to withdraw completely from the deal, which was enacted in 1994 to create a free-trade zone between the U.S., Mexico and Canada.
Trudeau said that he and Trump had discussed the Boeing-Bombardier dispute, which just this week saw the USA slap further import duties on Canadian plane maker Bombardier's new CSeries planes.
"Growth could be 1 percent higher if the country had better accountability and more transparency".
He said content rules for auto parts were still negotiable, despite shock in Mexico at suggestions half of all parts in cars should be made in the United States. Commenting on a recent article he penned for Americas Quarterly, Herrera outlines why he thinks that more independents and parties competing to win will dampen prospects for one frontrunner in particular-leftist ex-Mayor of Mexico City Andrés Manuel López Obrador.
Asked during his appearance with Trudeau whether NAFTA was dead, Trump said, "We'll see what happens".
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"We are much worse off with a bad deal than without a deal", said Guillermo Vogel, Vice President of Steelmaker Tenaris, who co-hosted a meeting of Mexican and United States business leaders in Mexico City aimed at pursuing strategies of defending NAFTA. The United States takes in three quarters of Canadian exports, but trade relations have been strained since Trump's inauguration earlier this year. Trump made revamping or ending NAFTA - which he has called "a bad deal for our country" - a core pillar of his election campaign as he promised more benefits for United States workers in global trade deals. Replying to a question, Trump said he would consider a trade pact with Canada minus Mexico, adding that both the USA and Canada wanted to protect their workers.
However, a study released on Thursday by the Motor Equipment Manufacturers Association, which represents USA auto parts makers, showed the higher content requirements would lead to the loss of up to 24,000 U.S.jobs, as some companies would forgo NAFTA's tariff-free benefits and ship in more components from other countries.
"There's been huge investments in Canada, the USA and Mexico, that are long-term assets", said Don Walker, chief executive officer of Magna International Inc. a Canada-based parts maker with more than 25,000 employees in the U.S. Those "could doom the entire deal", Thomas Donohue, the Chamber's CEO said October 11.
The rules of origin demands are among several conditions that the U.S. Chamber of Commerce has labelled "poison pill proposals" that threaten to torpedo the talks. "We'll see if we can do the kind of changes that we need".
The Chamber and the trade group for Mexico's auto industry already have come out against an anticipated proposal to raise USA -specific content.