Mexico seeks US talks over car-rules dispute under trade pact
Mexico is seeking formal consultations with the U.S. over rules for cars shipped across regional borders under a year-old trade agreement as it seeks to de-escalate a conflict that emerged last month.
The Mexican government wants the talks in order to avoid or settle a potential dispute over the requirements the U.S. is imposing on motor-vehicle producers, according to a letter dated Friday from Economy Ministry Secretary Tatiana Clouthier to U.S. Trade Representative Katherine Tai seen by Bloomberg News. Mexico says Washingtonβs interpretation of the rules is inconsistent with the text of the U.S.-Mexico-Canada Agreement.
The U.S. insists on a stricter way than Mexico and Canada believe they agreed to for counting the origin of certain core parts including engines, transmissions, and steering systems in the overall calculation, people familiar with the matter said in July. That makes it harder for plants in Mexico and Canada to meet the new threshold of 75% regional content, up from 62.5% under Nafta, in order to trade duty-free, the people said.
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[/vc_column_text][vc_column_text]For example, if a core part uses 75% regional content, and thus qualifies under that requirement for duty-free treatment, Mexico and Canada argue that USMCA allows them to round the number up to 100% for the purposes of meeting a second, broader requirement for an entire carβs overall regional content. The U.S., however, doesnβt want to permit rounding up, making it tougher to reach the duty-free threshold for the overall vehicle.
Thatβs how the issue is summarized in a note written by Mexicoβs Automotive Industry Association, known as AMIA, and obtained by Bloomberg News.
USTR spokesman Adam Hodge said in an email that U.S. officials are βreviewing Mexicoβs request for consultations and remain committed to fully implementing the USMCA, including the strong auto regional content requirements to which we all agreed.β
The Mexican Economy Ministryβs press office declined to comment. Mexico copied Canadian Trade Minister Mary Ng on the letter.
You can read the original posting hereΒ > AJOT By: Eric Martin | Aug 23 2021 at 01:29 PM |Β International Trade
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