August 1, 2018 / 4:43 PM / 4 months ago

U.S., Mexico getting close to deal on autos content rules at NAFTA: Mexico

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By Joseph White

TRAVERSE CITY, Mich., Aug 1 (Reuters) - The United States and Mexico are getting close to a deal on the key issue of autos content rules at talks to renew the NAFTA trade pact, a senior Mexican official said on Wednesday.

Guillermo Malpica, head of the trade and NAFTA office for the Mexican government, also said the United States had “started showing more flexibility last week” on autos content and other topics at the negotiations, which have dragged on for almost a year.

Mexican officials say they are optimistic about the possibility of getting a deal to renew the North American Free Trade Agreement and are hopeful of progress when ministers from Mexico and the United States meet this week.

Malpica, speaking to reporters at an auto industry conference, said “we are getting close” to an agreement on the so-called autos rules of origin, which dictate how much of a vehicle must be made in the three NAFTA nations to qualify for duty-free status.

The Mexican peso spiked 0.2 percent to its strongest level of the day after news of progress on the autos element of talks, before slipping back. Some analysts forecast the peso will appreciate to below 18 per dollar from its current level of 18.6 if there is a deal.

In May, Mexico offered to raise the autos content requirement to 70 percent from a current 62.5 percent. The United States is asking for the threshold to be 75 percent.

Malpica also said the United States was still pushing for a sunset clause that would require the treaty to be reopened every five years. Canada and Mexico strongly oppose the idea. (Reporting by Joe White in Traverse City, Mich. And Frank Jack Daniel in Mexico City Writing by David Ljunggren Editing by Alistair Bell)

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