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Report: US drops auto-content demand in NAFTA talks

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Report: US drops auto-content demand in NAFTA talks

The U.S. government has dropped a demand that all vehicles built in Canada and Mexico for export to the U.S. must contain at least 50% U.S. content, one of the key sticking points in the North American Free Trade Agreement talks, Reuters reported March 20, citing Canadian newspaper The Globe and Mail.

U.S. President Donald Trump's administration withdrew the demand during NAFTA discussions in Washington in the week of March 12, which included a meeting between Canadian Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer, unnamed sources reportedly told The Globe and Mail on March 20.

Freeland's chief spokesman declined to comment on the report and said Canada and the U.S. continued to work well together, Reuters said.

Canadian Prime Minister Justin Trudeau said early in the week of March 19 that Trump appeared to be "enthusiastic" about coming to an agreement on NAFTA, the news wire added.

The Trump administration had often threatened to withdraw from the $1.3-trillion trade pact unless the U.S. got a good deal, which includes demands to increase the amount of NAFTA content in autos to 85% from 62.5% and to secure 50% of the total for the U.S. These proposals have been opposed by Mexico, Canada and several companies, Reuters reported.

The three countries are scheduled to meet for the next round of NAFTA talks in mid-April in Washington. Should the three countries reach a new trade deal to Trump's liking, the president said he will make the tariffs exemptions on steel and aluminum to Canada and Mexico permanent.