Mexico’s secretary of the economy, Ildefonso Guajardo, is taking a particularly hard line against Japan’s automotive industry, a position that some negotiators said helped dash any hope of completing the trade deal in Maui.There remain a lot of other issues, including pharmaceuticals and dairy, but this disagreement between Mexico and Japan is one of the key remaining sticking points in the negotiations. For Mexico, the auto sector is a booming industry amid an otherwise sluggish economy, meaning the details are worth fighting.
At issue is the definition of a car or truck from one of the Trans-Pacific Partnership countries. Mexico wants only vehicles with around 65 percent of their components made in the T.P.P. region to qualify for lower tariff barriers under the deal. That would favor Mexican trucks made with American and Japanese parts. Japan wants that “rule of origin” threshold set closer to 50 percent, favoring its parts suppliers in China and Thailand.
Interesting detail from NYT on the TPP negotiations: