DETROIT — A reworked North American Free Trade Agreement wouldn't make sense if it excluded Canada, Joe Hinrichs, Ford Motor Co.'s president of global operations, said Monday.
Hinrichs, speaking at a luncheon for the Original Equipment Suppliers Association, said he's optimistic that all three countries in NAFTA can reach an agreement, despite news late last week that talks had stalled between the U.S. and Canada.
The U.S. and Mexico last month had come to a bilateral agreement, and President Donald Trump has threatened to pull the plug on talks and continue on without Canada.
"It's very important that Canada be a part of it," Hinrichs said. "I can't envision a future of the North American automotive industry where Canada is separated out. We're too integrated on too many issues."
The sides remain at odds on a handful of issues. Canada is seeking some kind of guarantee that, if a deal is reached, it won't be hit with the auto tariffs Trump is threatening.
The latest talks also have hinged on dispute panels meant to handle anti-dumping and countervailing duty cases. The U.S. wants to kill the panels, enshrined in Chapter 19 of the current NAFTA, while Canada wants to keep them in some form.
The countries also are discussing one of Canada's key bargaining chips, dairy concessions, which has angered farmers in the country.
"It's fair to say the challenges with the [U.S. and Canada] right now aren't necessarily around the auto business," Hinrichs said. "We don't want the auto business to be the unfortunate casualty of other issues."
Ford builds a number of vehicles in Canada, including the Ford Edge, Flex and GT, and the Lincoln Nautilus and MKT.
Hinrichs declined to say how the company's business would be affected if there is no deal, saying he is optimistic that one will get done.
"It's the rational, logical thing to do for the auto industry," he said.
Talks this week could be critical. The sides want to sign an accord before Mexico's president-elect, Andres Manuel Lopez Obrador, takes office Dec. 1. To do so, they would have to publish a deal by Sept. 30 and thus would need to reach an agreement imminently to have time to put it into legal text.
The countries also could extend the talks past Sept. 30.
"I worry a little bit that we'll run out of time and other consequences will happen," Hinrichs said. "But we're continuing to tell everybody involved that it's certainly our expectation that there's a modernization of NAFTA with all three countries involved."
Bloomberg and Reuters contributed to this report.
