By David Lawder
WASHINGTON, Nov 29 (Reuters) - Mexican Economy Minister Ildefonso Guajardo said on Wednesday that a Trump administration demand for a U.S.-specific automotive content requirement in NAFTA was "not viable," and declined to say when Mexico would offer a counterproposal.
At a news conference following a series of meetings with U.S. trade officials and lawmakers in Washington, Guajardo said that Mexico was still trying to understand the U.S. proposals to require 50 percent of vehicles' value content be produced in the United States as part of updated North American Free Trade Agreement rules.
"I was clear that the domestic content (requirement) is something that is not viable at this point," Guajardo said.
He added that Mexico would eventually make a counterproposal on automotive rules of origin, but declined to specify the timing of that response.
U.S. officials had complained that during the last NAFTA negotiating round Mexico and Canada had not offered counterproposals to its demands on autos and other major areas aimed at "rebalancing" the trade pact to shrink U.S. trade deficits. United States also is seeking to lift the regional value content requirement for NAFTA-produced cars and trucks to 85 percent from 62.5 percent. Guajardo said that once Mexico has a firm understanding of the U.S. autos proposal, it can work with its own stakeholders to see what adjustments could be made to regional content for autos.
But he said that the U.S. demand to move to 85 percent regional content within three years was "entirely unrealistic."
On dispute settlement, Guajardo said that Mexico would be willing to consider some adjustments to the investor-state dispute settlement system, after the United States proposed making the use of such arbitration panels optional.
"We can explore the opt-in, as long as we can define our own opt-in," Guajardo said of the dispute settlement proposal. "If the intention is to write, collectively, our opt-in, we're not interested, because then we would not have control over our own commitments that we have with investments."
He added that Mexico needed to send "clear messages" on NAFTA proposals that are unacceptable.
Another round of NAFTA negotiation is expected in mid-December in Washington.