Published:  12:14 AM, 11 October 2017

Shaky NAFTA deal threatens Navistar's exports to world

Shaky NAFTA deal threatens Navistar's exports to world Employees work at the assembly line of International brand commercial trucks, owned by Navistar, at the manufacturing plant in Escobedo, on the outskirts of Monterrey, Mexico. -Reuters

Less than half the trucks exported from Navistar's mammoth Escobedo plant in Mexico are sold in North America but the factory's success remains tightly tied to the uncertain future of the region's NAFTA free trade deal. Navistar's Mexican factory, now the US company's largest worldwide, exports to around 30 countries and sells less to the United States than competitors such as Daimler AG, one of the top three truck-makers in Mexico, which sends three-quarters of its Mexican-made commercial vehicles north.

But Navistar's reliance on tariff-free imported parts shows why even Mexico manufacturers that have diversified their customer base away from the United States still fear U.S. President Donald Trump's threats to scrap NAFTA. "To lose this treaty would be to go backwards 40 years," said Oscar Ruiz, operations director at the plant, fearing a return to an era when barriers made foreign investment and trade expensive between the two neighbors.

Trade negotiators from the United States, Mexico and Canada will meet this week in Washington for a fourth round of talks on reworking NAFTA amid growing signs of an impasse between the Trump administration and the other two signatories of the pact. Mexican officials warn that Trump is leading the region towards a protectionist trade war with his "America First" policy, flirting with major curbs on commerce.

-Reuters, Monterrey


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