Scrapping NAFTA

Wednesday, 01 March 2017

The U.S. and Mexican auto sectors have become so intertwined since the inception of the North American Free Trade Agreement that the industry itself is baffled as to how it would wean itself off the brisk cross-border trade in car parts. President Donald Trump has vowed to renegotiate the 23-year-old trade pact, a move he says would shift plants — and jobs — back to the United States, but it’s not clear that even tearing up NAFTA and existing supply chains would do that. The automotive industry is at the heart of U.S.-Mexico trade — and not just in finished vehicles. Steering wheels, dashboards, circuits, and other car parts zigzag across the borders of Canada, Mexico, and the United States many times before ending up in a vehicle in Detroit or Monterrey, Mexico. Disentangling those complex international supply chains could imperil the industry, more than a dozen industry participants and experts told Foreign Policy.


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