Pacific trade pact
negotiators move closer to deal on rules for autos
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[September 24, 2015] (Reuters)
- Japan, the United States, Mexico and
Canada are moving closer to a deal on rules for the automotive industry
in a landmark Pacific trade deal, a leading obstacle to agreement on the
12-nation pact, officials briefed on the talks said on Wednesday.`
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Although two-day talks between negotiators from the four nations on
auto trade did not reach a final agreement, ministers were readying
for meetings in Atlanta next week for a final push to get the deal
over the finish line.
The United States has not confirmed the meeting of top trade
officials from the 12 nations in Atlanta. But Canadian Trade
Minister Ed Fast told Canadian Broadcasting Corp he would be in
Atlanta next week and would make sure the Trans-Pacific Partnership,
which will cover 40 percent of the world economy, would be in the
country's best interests.
“If Canada is not part of the TPP, our whole auto industry will be
at risk, because we will lose lots of opportunities to expand our
markets within the Asia-Pacific region … we are looking to include
clauses that would safeguard our industry," he said, declining to
give details.
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Canada, the United States, Mexico and Japan have been working to
resolve an impasse over how much local content is needed before cars
can be traded duty-free, one of the issues which blocked a deal at
the last TPP ministerial meeting in July.
Mexico and Canada, partners with the United States in the
20-year-old North American Free Trade Agreement, have built
automotive supply chains based on a threshold of 62.5 percent local
content, and objected to having a much lower threshold in the TPP,
which they feared would favor Asian auto parts makers such as
Thailand.
An official close to the TPP negotiations said the auto talks in San
Francisco were productive and progress was made in narrowing gaps on
the outstanding issues.
"While agreement on a landing zone was not reached, the four parties
took an important step forward and agreed to continue their work in
the near future," he said.
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Another official cautioned there was still a long way to go, but a
third said the plan was to come to an agreement in Atlanta, where
ministers would meet from Sept. 30 until Oct. 1 or Oct. 2. All four
parties are committed to coming to an agreement but there are no
final figures yet, the third source said.
A low local content threshold would mean that Japanese carmakers
such as Toyota Motor Corp could source inputs from fellow Asian
nations and still qualify for duty-free imports to the United States
under the TPP, which is set to scrap tariffs of 2.5 percent on cars
and 25 percent on light trucks, likely phased out over 20 or so
years.
U.S. unions want the threshold be at least as high as NAFTA and rise
to 75 percent. Auto parts makers in Canada and Mexico have said the
minimum must be 50 percent.
(Reporting by Reuters bureaus; Writing by Krista Hughes; Editing by
Tom Brown)
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