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An employee works on test frame of a car in Puebla, Mexico. Photo: Susana Gonzalez / Bloomberg via Getty Images

The latest U.S. proposal in NAFTA negotiations with Canada and Mexico includes a provision that would involve higher wages for auto workers in Mexico, the Globe and Mail reports and sources close to the negotiation confirm to Axios.

Why it matters: This is the latest attempt to resolve a dispute over which cars are subject to tariffs under auto rules of origin, one of the major sticking point in negotiations.

Mexico’s negotiators argue that would make North American auto production less competitive and are unlikely to approve it, the sources say. And any proposal that makes it past the negotiators would have to be approved by the Mexican Congress.

  • The U.S. case is that higher wages mean "creating more middle-class Mexican buyers of imported goods, and reducing the incentive to shift car plants from high-wage countries," per the Globe and Mail. Canada has also expressed enthusiasm for proposals that would bring more production to the U.S.

Context: This signals a change in strategy from the U.S., with the wage proposal replacing a demand that cars be constructed with 50% American content, according to the sources.

  • Mexican Economy Secretary Ildefonso Guajardo said last week that he is about to present his own auto proposal. The eighth round of negotiations, which was supposed to take place this month, is expected to begin April 8 in Washington, per the sources.

The office of the U.S. Trade Representative would not comment on the proposal as the negotiations are ongoing.

Go deeper

In cyber espionage, U.S. is both hunted and hunter

Illustration: Eniola Odetunde/Axios

American outrage over foreign cyber espionage, like Russia's SolarWinds hack, obscures the uncomfortable reality that the U.S. secretly does just the same thing to other countries.

Why it matters: Secrecy is often necessary in cyber spying to protect sources and methods, preserve strategic edges that may stem from purloined information, and prevent diplomatic incidents.

57 mins ago - Politics & Policy
Scoop

White House plots "full-court press" for $1.9 trillion relief plan

National Economic Council Director Brian Deese speaks during a White House news briefing. Photo: Alex Wong/Getty Images

The Biden White House is deploying top officials to get a wide ideological spectrum of lawmakers, governors and mayors on board with the president’s $1.9 trillion COVID relief proposal, according to people familiar with the matter.

Why it matters: The broad, choreographed effort shows just how crucially Biden views the stimulus to the nation's recovery and his own political success.

58 mins ago - World

Scoop: Sudan wants to seal Israel normalization deal at White House

Burhan. Photo: Mazen Mahdi/AFP via Getty

Three months after Sudan agreed to normalize relations with Israel, it still hasn't signed an agreement to formally do so. Israeli officials tell me one reason has now emerged: Sudan wants to sign the deal at the White House.

Driving the news: Israel sent Sudan a draft agreement for establishing diplomatic relations several weeks ago, but the Sudanese didn’t reply, the officials say. On Tuesday, Israeli Minister of Intelligence Eli Cohen raised that issue in Khartoum during the first-ever visit of an Israeli minister to Sudan.

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