Trump predicts auto workers will be ‘very happy’ with NAFTA

WASHINGTON — President Donald Trump has predicted US automakers and auto workers would be “very happy” with the outcome of talks over the North American Free Trade Agreement, which have stalled amid a dispute over rules for car production.

Trump told reporters on the South Lawn that “you’ll be seeing very soon what I’m talking about,” noting that both Mexico and Canada have been “very difficult to deal with” during the negotiations.

“I am not happy with their requests. But I will tell you in the end we win, we will win and will win big,” Trump said before departing for New York. He said America’s neighbours have been “very spoiled because nobody’s done this but I will tell you that what they ask for is not fair. Our auto workers are going to be extremely happy.”

The US remains far apart on the talks over rewriting the trade pact with Canada and Mexico. Treasury Secretary Steven Mnuchin has said that efforts to renegotiate the trade agreement could spill into next year.

Mexico has so far resisted US attempts to get higher regional content rules in the auto industry and move production to higher-wage US and Canadian factories. The US has also sought to change NAFTA’s dispute-resolution system, and include a sunset clause that would allow countries to exit after five years.

The Trump administration has already missed an informal deadline that had been set by House Speaker Paul Ryan to get a revamped deal to Congress in time for lawmakers to vote on it in a midterm election year. Mexico, meanwhile, will hold presidential elections on July 1 and Andres Manuel Lopez Obrador, the leftist candidate who has led in polls, has said the re-negotiation shouldn’t be rushed through and should be left to the winner of the election.

If the negotiators fail to agree to a revamped version of NAFTA, the discussions could be extended into 2019. Trump could also carry out his threat to abandon the agreement that he has long railed against, throwing commerce among the three countries into disarray.

Trump has sought to overhaul NAFTA in an effort to return auto production to the United States and reduce America’s trade deficit. The US has been demanding that a percentage of a car’s content of auto parts originate in a country – the US or Canada – with average auto worker wages of about $15 an hour to qualify for NAFTA’s duty-free status.

But companies have built supply chains that straddle NAFTA borders and changing the rules could disrupt their operations, raise costs and potentially put them at a competitive disadvantage with manufacturers in Asia and Europe.