WASHINGTON (Reuters) - The Trump administration on Thursday estimated that its new North American trade deal will create 76,000 automotive sector jobs within five years as automakers invest some $34 billion in new plants to comply with the pact's new regional content rules.
The forecasts from the U.S. Trade Representative's office were released ahead of an independent trade panel's hotly anticipated analysis that economists expect to show little or no U.S. gains from the new U.S.-Canada-Mexico Agreement.
A USTR official told reporters that the jobs and investment estimates are based on plans disclosed by automakers to the trade agency for compliance with the new agreement's tighter rules of origin. These require 75 percent of a vehicle's content to be produced in North American, with 40-45 percent produced in high wage areas, namely the United States or Canada.
A senior USTR official told reporters that none of the 15 automakers producing vehicles in North America intend to opt out of the agreement to pay U.S. tariffs instead and move production overseas, as some critics of the deal have suggested.
"They have verbally committed to us that they intend to comply with the rules," the official said. "And they have told us that this is not going to have significant upward pressure on vehicle prices."
The estimates include about $15.3 billion investments previously announced by Fiat Chrysler, Ford Motor (NYSE:F), General Motors (NYSE:GM) Toyota Volkswagen (DE:VOWG_p) and battery maker SK Innovation.