Fiat 500 and Dodge Journey vehicles sit on the production line after being painted at Chrysler Group LLC's assembly plant in Toluca, Mexico.Susana Gonzalez/Bloomberg
Strengthening rules of origin for vehicles made in Mexico under a new North American free-trade agreement will not stop the flood of automotive jobs into that country, leaders of the major auto industry unions in Canada and the United States said Friday.
Jerry Dias, president of Unifor, and Dennis Williams, president of the United Auto Workers, said a new agreement needs to ensure that wages and standards of living rise for Mexican workers and that Canada and the United States win a greater share of auto-industry jobs.
"How do we wrestle back the work and how do we change the standard of living for Mexican workers?" Mr. Dias said before he and Mr. Williams met with Canada's Foreign Affairs Minister Chrystia Freeland in Toronto.
The meeting came after U.S. Trade Representative Robert Lighthizer opened up talks on renegotiating NAFTA with a call last week for stronger rules of origin for vehicles made and sold in the three countries, and for a requirement that vehicles sold in the region have a certain amount of U.S. parts and labour content to qualify for duty-free shipment in the trade zone.
That call for a specific amount of U.S. content was rejected by Ms. Freeland last week and her position has not changed, her spokesman Adam Austen said Friday.
Mr. Austen pointed to her comments from last week, which were that "Canada is not in favour of specific national content in rules of origin." Ms. Freeland would not answer questions asked during a photo opportunity before the meeting.
Mr. Dias is in favour of stronger rules of origin for North American-made vehicles, but both union leaders warned that stronger NAFTA-wide rules of origin could likely lead to increased jobs in Mexico and not necessarily the United States. That would be the opposite of the Trump administration's intention, which is to increase jobs in vehicle and parts manufacturing in the United States.
Stricter U.S. content rules could also work contrary to the way that U.S. officials want, auto industry officials and trade experts have said. Auto makers and parts companies could decide not to meet NAFTA requirements and instead meet the current U.S. tariff on non-North American vehicles and parts, which is just 2.5 per cent.
"Rule of origin in itself doesn't help us," Mr. Williams said. "It helps us a bit, but it doesn't solve the problem."
Mr. Dias said a new agreement could probably put "a wall around Canada and the United States" that protects auto jobs, but neither he nor Mr. Williams would say where they stand on a specific U.S. content rule.
They promised to fight any deal that doesn't contain clauses designed to improve the lives of workers in Mexico.
"We'll just simply yell at the top of our lungs that we're getting another raw deal," Mr. Williams told reporters after the meeting.
Auto makers oppose stricter rules of origin for vehicles, noting that the requirement that cars and trucks contain 62.5-per-cent content from North American countries is the most stringent they face in any global trade agreement.
Companies that make auto parts have said that rule requiring that a specific amount of content be U.S.-sourced would disrupt supply chains that have been established in the 23 years since the original NAFTA deal came into force in 1994, and are working well.
Mr. Dias pointed to the Cami plant operated by General Motors Co. in Ingersoll, Ont., as a "poster child" for what he believes is wrong about the current NAFTA deal.
GM has shifted production of the GMC Terrain crossover to Mexico from the Ingersoll plant, which will lead to the loss of 600 jobs.
Unifor and GM are negotiating on a new contract to replace the labour deal that expires in September. Mr. Dias said Unifor workers are prepared to go on strike if the auto maker does not designate another vehicle to be made in Cami so that the jobs will be kept there.
There has been no discussion yet with GM about whether it is prepared to earmark another vehicle for Cami, Mr. Dias said.
The plant, which employs about 3,000 people, also assembles the Chevrolet Equinox crossover.