American And Mexican Car Makers Oppose NAFTA Proposals

October 23, 2017

Auto manufacturers in Mexico are balking at the Trump administration’s proposed changes to the North American Free Trade Agreement, but they’re not the only industry group resisting.

The Trump administration’s proposed rules are not sustainable, said Eduardo Solis, head of Mexican Automotive Industry Association, according to local media reports.

The rules would require that at least 50 percent of the North American components of vehicles come from the U.S, but most American companies probably wouldn’t like that either, said Tim Meyer, a professor of international law at Vanderbilt Law School.

“It’s just a segment of the auto industry, particularly auto parts, that stands to potentially gain in the United States,” Meyer said.

The fewer parts American manufacturers can bring from Mexico, the more expensive cars will be, Meyer said. But if a proposal like this one did pass?

“The industry groups will fall into line, and perhaps reluctantly support the deal,” Meyer said.

At least for car makers, Meyer said, a bad deal would be better than no deal at all.