The North American Free Trade Agreement’s rules of origin for the automotive sector are obsolete and will be a major focus during renegotiations, U.S. Commerce Secretary Wilbur Ross said Thursday.
Currently, 62.5 per cent of automobiles and light-duty vehicles must be manufactured with parts from any combination of the United States, Canada or Mexico. Ross said automakers are skirting the percentage, which was moved to 62.5 per cent in 2002.
“One of the many problems with the rules of origin in NAFTA, as currently drafted is that, in the case of autos, it went specifically part-by-part.
“NAFTA is an old agreement and many of those parts are no longer even used in cars because auto technology has moved on,” Ross said. “Leave aside the question of whether the percentages were right, it simply is an obsolete provision and essentially a backdoor way for non-NAFTA goods to take advantage of NAFTA.”
You can watch the entire interview below.