Mexico wants talks with United States over auto content rules in trade pact, Auto News, ET Auto

By Sharay Angulo

MEXICO CITY: Mexico sought formal session with the USA on Friday over the interpretation and utility of harder content material guidelines for cars set out within the USMCA commerce pact.

In Might, Mexico voiced disagreement over the problem in a three-way on-line digital assembly when it cited variations with the USA strategies. Canada and Mexico use extra versatile interpretations.

“Mexico has recognized a divergent place between our governments on the interpretation of … provisions on guidelines of origin for the automotive sector,” Financial system Minister Tatiana Clouthier stated in a letter.

In her letter on Friday to U.S. Commerce Consultant Katherine Tai, Clouthier stated Mexico wished to keep away from or resolve a doable dispute.

America-Mexico-Canada Settlement (USMCA), the successor to the North American Free Commerce Settlement (NAFTA), requires 75% North American content material for a car to be thought-about as being from North America.

The identical proportion will apply for so-called important components from July 1, 2023, up from 69% now, and in comparison with 62.5% below the earlier commerce pact.

However as soon as the extent of important components hits 75%, it’s thought-about 100% and needs to be counted as such in direction of the general worth of the car, Mexico says.

Its request for session is the primary non-contentious stage of a dispute decision mechanism supplied for in Chapter 31 of the pact, with an business skilled saying such talks have to be held inside 30 days, on this case by Sept. 20.

America is reviewing the request, stated U.S. Commerce Consultant spokesman Adam Hodge.

“We’re reviewing Mexico’s request for consultations and stay dedicated to completely implementing the USMCA, together with the robust auto regional content material necessities to which all of us agreed,” he stated.

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The vote, with safeguards agreed upon by Mexico and the USA to make sure a good vote, was the primary take a look at of labor guidelines below an accord that changed the 1994 North American Free Commerce Settlement (NAFTA).

The settlement was reached in “an atmosphere of challenges, the place the automotive business struggles to maintain its restoration going after greater than a yr of the coronavirus pandemic, and within the face of the semiconductor (chip) scarcity,” Volkswagen stated.