The Trump administration which brought back the controversial North American Free Trade Agreement (NAFTA) in 2017 has been facing flak ever since it was tabled between the three member countries.
Automotive supply chains in North America are now notifying their intentions to Congress about updating the regional trade pact, and a law for speedy reviews under which negotiators would have extra 30 days to fill in details.
Reports suggest that the majority of the automakers in North America are eagerly waiting for the final deal in order to get a clear idea about the expense that might occur on the companies due to the new standards.
As per reports, the requirement for North American made components is expected to be raised from the current 62.5 per cent to 75 per cent
As per reports, the requirement for North American made components is expected to be raised from the current 62.5 per cent to 75 per cent. Apart from that, it would also require that 40 to 45 per cent of auto content be made by workers earning at least $16 per hour.
The Trump administration-induced move is primarily aimed at discouraging car companies from moving their production out of the country in search of lower wages.
Experts suggest that companies such as Toyota, Honda and Nissan might find it difficult to meet stringent requirement proposed in the deal
Ahead of the talks between the three countries, in an unreported letter signed by the President of Association of Global Automakers, John Bozzella took a stand earlier in August, resenting against the move and stating that the association would not support the revamped policies of the NAFTA without any further classifications, assurances and modifications.
Experts suggest that companies such as Toyota Motor Corp, Nissan and Honda which are a part of the association with lesser reach in North America and lesser research and development staff in the country might find it difficult to meet the stringent requirements in the coming years.