MEXICO CITY, March 4 (Xinhua) -- Mexican negotiators taking part in the North American Free Trade Agreement (NAFTA) talks here said Sunday it is still possible to find a compromise to the automobiles rules of origin dispute, despite planned U.S. tariffs on steel and aluminum imports.
Mexico's chief technical negotiator Kenneth Smith said there was positive dialogue during the seventh round of talks involving the United States, Mexico and Canada, which closes Monday.
"We believe there is still space to continue talking in a constructive manner and to find a good result at the end of the day," Smith told the press. "I feel we had a positive dialogue in this round, we want technical discussions on rules of origin to resume in the coming days."
While the three sides discussed Canada's proposals for the rules of origin, the Mexican side has also been sitting down with its automotive sector to find ways to resolve this impasse, considered the main stumbling block in the talks.
The rules of origin determine what percentage of vehicles must be manufactured in North America to meet NAFTA yardsticks. Canada and Mexico are in favor of maintaining the 62.5 percent rate for vehicles and 60 percent for auto parts that was put in place in 1994. However, the U.S. side is demanding that the North American content be raised to 85 percent and introduce a minimum 50-percent U.S. origin requirement.
Canada has offered a counter-proposal to change the way vehicle costs are measured and use this to determine the rules of origin.
Canada's proposal was followed by a threat by U.S. President Donald Trump to slap 25 percent tariff on steel imports and 10 percent tariff on aluminum imports.
The U.S. move would be a major disruption to rules of origin talks since the two are essential for manufacturing vehicles.
However, Mexican negotiator Salvador Behar said the two issues were not linked.
"There are some successes we can show but we still have a little more to do," the chief Canadian negotiator, Steve Verheul, added.
The eighth round of talks will be held in the first half of April.
The talks to modernize the two-decade-old NAFTA have been taking place since August 2017. More than 30 topics have been addressed so far, including regulatory improvements, small and medium-sized enterprises, economic competition and anti-corruption.
