Lighthizer and Pence discuss NAFTA, rule of origin with ‘big three’ auto executives

Executives from the “big three” automakers on Monday met with Vice President Mike Pence and U.S. Trade Representative Robert Lighthizer to discuss trade and the industry’s concerns with the U.S. proposal on the NAFTA automotive rule of origin.

 

Sources told Inside U.S. Trade the companies pushed for the meeting with Pence to reiterate at the highest levels their opposition to the U.S. proposal, and that the American Automotive Policy Council, which represents the big three automakers, had set up the meeting.

 

But a spokesman for AAPC told Inside U.S. Trade later on Monday that the vice president’s office requested the meeting, “and we appreciated it.”

 

A spokeswoman for Pence said before the meeting that the Vice President, Lighthizer and National Economic Council Director Gary Cohn would “sit down” with “executives from the three largest American auto manufacturers (General Motors, Fiat Chrysler, and Ford) to discuss trade, commerce, and manufacturing policy and how it impacts their businesses.”

 

Sources said NAFTA and the proposal USTR has put forward on the automotive rule of origin would be among the top agenda items — and that the companies’ complaints about the approach were the main reasons behind the meeting.

 

The big three have long tried to engage with Lighthizer and other USTR officials on the proposal, but those efforts to date have been unsuccessful, industry sources told Inside U.S. Trade last week.

 

One industry representative said it was unclear how the three countries could get to “a path to success” if the U.S. does not drop its domestic content requirement for autos because it would not be politically feasible for Canada and Mexico to agree to such an approach.

 

The companies also have increasingly appealed to governors for help in making their stance known to the White House.

 

The Pence spokeswoman said following the meeting that the administration officials and auto leaders discussed economic priorities including tax reform and trade policy.

 

“The Vice President emphasized President Trump’s commitment to enact historic tax cuts that will enable companies to create jobs, raise wages and spur American innovation. The Vice President also discussed the President’s firm commitment to grow manufacturing in the United States, reduce trade deficits, and strengthen the U.S. auto industry,” the spokeswoman said.

 

Former Missouri Gov. Matt Blunt, the AAPC President, said in a statement following the meeting that the group appreciated “the opportunity to continue our discussions with the Trump administration about the future of NAFTA and the U.S. auto industry.”

 

“We also appreciate the opportunity to directly address the industry's concerns with the administration’s rule of origin proposal,” Blunt added. He also reiterated other points the companies have stressed as their priorities for a NAFTA modernization, including the inclusion of strong and enforceable currency disciplines and “ensuring foreign markets accept products built to our standards are important components of a modern NAFTA agreement.”

 

At the fifth round of talks, which concluded in Mexico City last week, the U.S. auto rule-of-origin proposal was called into question by Mexican and Canadian negotiators who asked for an economic analysis that would justify the numbers USTR has tabled.

 

They were joined by U.S. lawmakers who called on the Commerce Department to conduct and share a “robust” economic analysis “that illustrates the impact on the full supply chain of the industries involved.”

 

The big three last month joined forces with the American International Automobile Dealers Association, the Alliance of Automobile Manufacturers, the Association of Global Automakers and the Motor & Equipment Manufacturers Association in opposing the U.S. position and lobbying Capitol Hill and the administration to abandon the proposal. — Jenny Leonard (jleonard@iwpnews.com)

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