Mexican officials have balked at a country-specific rule of origin, as their nation has attracted many auto parts and assembly operations in recent years that employ hundreds of thousands of workers.
Trump has continued his attacks on NAFTA throughout the talks launched in August, repeating his threats to terminate the pact if Mexico and Canada won't agree to changes. Nafta now lets manufacturers - such as garment makers - create cross-border supply chains in which parts of a final product are sourced from different countries before being assembled in a final location.
The Trump administration has proposed raising the threshold to 85 percent from the current 62 percent.More news: Joe Jonas engaged to Sophie Turner
Freeland said new USA content requirements would disrupt supply chains for the automobile industry, jeopardizing thousands of jobs.
USA opposition to NAFTA's dispute resolution mechanisms, plans to restrict outside access to government contracts and attacks on Canadian dairy and softwood lumber producers have further stoked the grim mood among trade officials.
Two sources have told The canadian Press that the request was dropped Sunday evening during negotiations for the new version of the free trade Agreement north american (NAFTA). By Monday, Mexico's peso MXN=D2 hit a near five-month low with fears growing about the future of the deal underpinning $1.2 trillion in annual trade between the three countries.More news: Russian Federation on Israel's UNESCO decision: "US set poor example for Israel"
"This is why Canada is so appreciative of Mexico's support for a gender chapter in the modernization of NAFTA. this is a progressive step forward that we can't afford not to take".
US retailers are sounding the alarm as Nafta negotiations threaten to crumble. But leaders from his ruling Institutional Revolutionary Party are anxious that the end of the deal could provoke nationalist sentiment ahead of next year's presidential election, giving an added boost to far-left front-runner Andres Manuel Lopez Obrader.
"We couldn't accept it", the Mexican government source said Tuesday.More news: Amazon Introduces Logins For Teen Shoppers
"The importance of NAFTA [to Mexico] is that it's been an anchor of stability", said Rubio, who is based at Mexico's Center for Research for Development, an independent think tank, and Washington's Wilson Center.