A modernization of the NAFTA trade deal should protect existing industrial supply chains in North America, but could seek to source more work for future products from the member states to help create jobs, a top Mexican negotiator in the process said.
The government of U.S. President Donald Trump on Thursday triggered the process to start renegotiating the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, which could usher in formal talks by mid-August.
Trump has threatened to jettison the 23-year-old accord if he cannot rework it in favor of the United States, arguing it has gutted U.S. manufacturing by outsourcing jobs to Mexico.
NAFTA’s supporters say the integration of lower-cost Mexico into production chains has safeguarded employment by enabling North America to compete better with Asian and European rivals.
Mexican business leaders say toughening rules that stipulate a certain amount of content must be sourced from North America to qualify for NAFTA certification could be one way of allaying U.S. fears, and pave the way for an agreement on the revamp.