US trade negotiators have significantly softened their demands on regional local content as part of the latest round of NAFTA negotiations, reports say.
Reuters reported the Trump administration had demanded that North American-built vehicles contain 85% content made in NAFTA countries by value, up from the current 62.5%, along with half the value coming from the US. That was opposed by Canada and Mexico as well as the US auto industry.
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Reuters reports that the percentage has been cut by 10 percentage points, and the US specific percentage demand dropped.
"The U.S. put on the table 75% instead of 85% for the regional content value of the vehicle and its core components," said Eduardo Solis, head of Mexico's AMIA automotive industry association, according to Reuters.
Reuters reported that the 75% regional content is for major components such as engines, drivetrains, axles, suspensions and body panels. Aluminium and steel would go into a bucket of other parts and materials requiring 70% regional content, while a third bucket of lesser parts would require 65% regional content, the report said.
Trump's negotiating team is pushing for a deal by early May in order to meet US timelines for having an agreement approved, at the latest, by the lame-duck Congressional session following mid-term elections in November.
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