COMMENT: NAFTA rules of origin – regional or US auto content?

The Trump Administration has begun the process of renegotiating the North American Free Trade Agreement (“NAFTA”) with Canada and Mexico. Its overarching objective is to improve the US trade balance wherever possible. In regard to rules of origin for automotive production, the Administration has expressed interest in tightening the rules to increase the use of regional content as well as to enhance the use of “substantial US content.” While the former looks to be uncontroversial, the latter could become a sticking point.