Proposed U.S. steel, aluminum tariffs to impact NAFTA talks: Mexico expert

MEXICO CITY, March 1 (Xinhua) -- Proposed U.S. tariffs on steel and aluminum imports could affect ongoing trade talks on the automotive industry as part of the renegotiation of the North American Free Trade Agreement (NAFTA), a top business adviser to the Mexican government said on Thursday.

"It certainly is an issue because steel and aluminum are obviously part of the raw materials for automobiles, and for many of our manufactured products," said Moises Kalach, coordinator of the strategic advisory board to international negotiations at Mexico's Business Coordinating Council (CCE).

Earlier in the day in Washington, U.S. President Donald Trump said he will impose stiff tariffs on those two metals to protect America's national industry.

The proposal came as Mexico, the United States and Canada are meeting in Mexico City for the seventh round of talks to modernize the two-decade-old NAFTA, with the focus on rules of origin in the automotive sector, which stipulate what percentage of a vehicle should be regionally manufactured to be exempt from import duties.

"If a tariff is placed on the raw material, of course it is going to affect the rules of origin, that's why the negotiators were called to Washington," Kalach told reporters.

The U.S. negotiator on the matter, Jason Bernstein, returned to Washington to consult on Trump's announcement calling for a 25 percent tariff on steel and a 10 percent tariff on aluminum.

The U.S. has proposed changing the existing rules of origin so that a minimum of 85 percent of an automobile must be made in North America, with at least 50 percent of parts made in the United States, but Mexico and Canada want them to remain at 62.5 percent.

The new announcement is bound to delay any agreement on the subject, but negotiators have made progress on other issues, said Kalach, including telecommunications, phytosanitary measures and environmental regulations.

The ongoing seventh round of renegotiation is to conclude March 5, with the eighth round set to take place in Washington in early April. Enditem