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By David Shepardson
WASHINGTON, Oct 1 (Reuters) - U.S. Commerce Secretary Wilbur Ross sees tens of thousands of jobs flowing back into the U.S. auto sector, especially among suppliers, thanks to the Trump administration's new trade deal with Mexico and Canada, while industry executives and analysts are less upbeat as higher costs could hurt sales.
Ross told Bloomberg TV on Monday that "the vast majority" of the 250,000 auto parts jobs lost in the United States would return under the new agreement, which is called the United States-Mexico-Canada Agreement (USMCA). The manufacturing part of U.S. auto sector employed about 950,000 people in August, according to federal data.
Ross did not say when the jobs were lost or how long it would take for some to return, but cited the deal requirements for higher regional content and higher wages by the workers making those parts. Commerce Department officials declined further comment.
U.S. President Donald Trump blamed the North American Free Trade Agreement with Mexico and Canada for the loss of manufacturing jobs because companies shifted production facilities to lower-cost Mexico.
Almost 18 percent of the world's cars were made in the three countries in 2017, making North America the third-largest auto-producing region behind China and Europe, according to industry data.
U.S. automakers, including General Motors Co and Ford Motor Co, cheered the deal, despite higher costs, because it removed the risk that the disintegration of the pact would have posed to their business model, and provides the security they need to plan investment in future multi-year projects.
Administration and industry officials said the new trade pact will require suppliers to shift some production into the United States and Canada to meet the higher requirements of 75 percent regional content - up from the previous 62.5 percent - and 40 to 45 percent of vehicle value to be built in regions paying at least $16 an hour.
Auto executives said privately they thought the rules would require a modest shift of some parts production to the United States, but would not lead to a dramatic shift in employment.
The number of U.S. auto parts assembly jobs has dropped to about 577,000 jobs from about 850,000 in 2000 due to higher levels of automation and productivity in plants and a shift to lower-cost countries like Mexico. Today's employment level is around what it was a decade ago, before the 2007-2009 financial crisis.
The crisis prompted the bankruptcies of GM and Chrysler, the closing of numerous assembly and parts plants, and the loss of tens of thousands of jobs, as well as the U.S. government's $80 billion industry bailout to prevent deeper cuts.