Auto parts revamp to be key Canadian pitch at upcoming NAFTA round

Sources say Canada's key proposal at a high-stakes round of NAFTA negotiations this month will involve modernizing auto-parts rules.

Multiple sources inside and close to the Canadian government, speaking on condition of anonymity given the sensitivity of the talks, say the issue of auto parts will be a focal point of the next round of talks Jan. 23-28 in Montreal.

They say Foreign Affairs Minister Chrystia Freeland and U.S. Commerce Secretary Wilbur Ross agreed during discussions this week that auto parts should be a priority.

Canada is hoping to win U.S. support for an idea that might achieve its key goal of ensuring American content in cars while limiting disruptions to current supply chains.

The idea is that the rules for calculating domestic content need a revamp, with research into new fuel sources, batteries, lightweight materials, cameras and wireless technology taking up an ever-larger share of a car's value.

Canada will suggest that the traditional standards for calculating car parts is outdated, and leaves out increasingly important intellectual-property contributions where the U.S. is a world leader.