Jan 18, 2017
Changes to the rules of origin under the North American Free Trade Agreement (NAFTA) could “wreak havoc on supply chains,” especially in the auto sector, Osler international trade law expert Riyaz Dattu tells The Globe and Mail. In the article, author Greg Keenan explores the potential for major updates to NAFTA’s rules of origin as U.S. President Donald Trump’s administration officially settles in. Trump has repeatedly insisted that renegotiating NAFTA was at the top of his administration’s priority list, and trade experts are predicting this could include insisting any vehicle built in North America must contain a certain percentage of American content, according to the article. Riyaz, a partner in Osler’s International Trade and Investment Law Group, says any such alterations to the rules of origin will upend global supply chains for auto manufacturers and have a ripple effect on other industries, including the oil patch.
“It may wreak havoc on supply chains, because supply chains are currently based on the existing rules of origin, and the current rules may allow for third-country products to be embedded into the manufactured goods that are sold to the United States,” Riyaz tells The Globe and Mail. “While the target might be Mexico, if these rules are going to be part of NAFTA, we will get sideswiped.”
If you subscribe to The Globe and Mail online, you can find out more about NAFTA’s rules of origin by reading Greg Keenan’s article “Auto sector gears up for potential changes to NAFTA’s rules of origin.”