DETROIT — Call it self-protection or shrewd maneuvering.
Either way, domestic investments by the auto industry over the last year seem to have created a dynamic that could give President Donald Trump political room to declare victory on domestic job creation and back away from a threatened withdrawal from the North American Free Trade Agreement.
That would allow professional trade negotiators and industry advisers to refocus on modernizing the 24-year-old agreement as the next round of talks gets underway this week in Montreal.
Following the enactment of tax cuts, which the president claims will spur economic growth and hiring, there is growing confidence among auto industry leaders that Canada and Mexico can strike a deal with the U.S. that doesn't harm the integrated, regional production platform critical to their global competitiveness. For the first time, they see signs Trump's team might bend on its most hard-line positions, including higher thresholds for U.S. content and tighter tracing of where parts originate.
Given the president's itchy Twitter finger and his record of vacillating in the midst of negotiations, no agreement is safe until the ink is dry. And reports last week suggested that the administration is frustrated by what it sees as intransigence from Canada and Mexico and remains prepared to scotch the deal.
But the mood is decidedly more upbeat than it was even six weeks ago, when industry officials seemed resigned to NAFTA's downfall.
"I think there's some flexibility from the U.S. perspective" as partner nations indicate willingness to address the administration's demand for higher domestic content, as long as the regional content value isn't tilted by rule to the U.S., Flavio Volpe, president of the Automotive Parts Manufacturers' Association in Canada, said in an interview last week on the sidelines of the Automotive News World Congress here.
Volpe, who has become a key counselor for the Canadian government's negotiating team, put the chances for success at 90 percent, saying the talks have been aided by quiet meetings among professional trade negotiators without the presence of political leaders over the last month.
Oscar Albin, Volpe's counterpart with Mexico's auto-parts trade group, said there is just a 25 percent chance that NAFTA talks will fall apart, citing discussions with Mexico's economics minister, Ildefonso Guajardo Villarreal.