Canada and Mexico are reluctant to give in, and say some U.S. demands to shrink its trade deficit would cause more harm than having no North American Free Trade Agreement at all.
But with political pressure building for talks to wrap up in coming months, one side will have to give in soon. To show just how difficult it could be to have successful negotiations, the tables below describe the five most contentious American proposals — described by the U.S. Chamber of Commerce as poison pills — and where Canada and Mexico stand.
For Trump, a major focus in Nafta is the automobile industry, which has taken advantage of the tariff-free zone by building a supply chain throughout North America, with a heavy manufacturing presence in Mexico where labor is cheaper.
In a bid to revive U.S. factories, the White House has proposed raising the so-called automotive rules of origin, which is the minimum threshold of a vehicle or part that must come from the Nafta region to be traded under the pact. It wants to raise it to 85 percent from 62.5 percent; add a U.S.-specific requirement of 50 percent; and expand the so-called tracing list that would raise paperwork requirements but also expose modern parts that are foreign, but are being counted as domestic under the current pact.
Automakers warn the proposals would upend supply chains.
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