First, let me quickly say what we in the business community see as a win, and then I'll quickly pivot to that question.
We're looking for a modernization that takes a 23-year-old trade agreement and brings it into the 21st century with provisions, for instance, those relating to digital commerce. When NAFTA was negotiated, the worldwide web was invented that same year, I think. So e-commerce, the ability to do business online, not just buying a package and having it shipped to your home, but doing your online banking, selling insurance across borders electronically, downloading software across borders are all evidence that today we don't just trade in goods or services, we trade in digits as well.
We know how to do this. The TPP had language to do that. There are other areas, for instance, in the area of sanitary and phytosanitary standards, where more recent trade agreements do a better job than NAFTA did to ensure that the regulations, potentially the behind the border barriers that can impede international commerce, are based on sound science and therefore are not simply a tricky form of protectionism.
Those are examples of the kinds of modernization we're looking for. In its objectives, the Trump administration has emphasized a number of issues just like those. A few others have raised some questions. For instance, the first objective in their official document relates to the U.S. bilateral trade deficit. We at the U.S. Chamber do not believe that the trade deficit, the trade balance, is an appropriate yardstick for measuring whether or not a trade agreement or a bilateral trade relationship is working. Rather, it reflects macroeconomic realities. It's no more significant than in the case of the Murphy household the fact that I have a trade deficit with my grocery store or my barber or any other retail establishment I go to, but I do have a trade surplus with my employer. There's near universal agreement in the economics profession on that. It raises questions about what exactly are the trade policy implications of that.
To their credit, the U.S. administration has said they want to expand trade, that it's not by limiting imports that they hope to achieve that goal of more trade balance. But we're waiting for details on that.
Another objective that they've laid out is strengthening the rules of origin in NAFTA. We haven't seen specific text on this introduced by the U.S. administration yet. This causes us some concern though, because NAFTA already has some of the strongest rules of origin of any free trade agreement in the world. If you look at the auto sector, which is often at the fore in this, the 62.5% is higher than any other trade agreement. The concern is that if you raise that level substantially, it's a tool that cannot succeed in compelling industry to increase the North American content. After all, the U.S. external MFN tariff that we have on autos is 2.5%.
If complying with the bureaucracy and rules related to rules of origin is too complex, too costly, then companies will simply pay the tariff. There are a number of real world examples like that which we continue to try to impress on a negotiating team and try to push them in a productive manner.