Mexico wants talks with US on auto content rules in trade pact

MEXICO CITY, Aug. 20 (Reuters) – Mexico on Friday requested formal consultations with the United States on the interpretation and application of the stricter content rules for automobiles set out in the USMCA’s trade pact.

In May, Mexico disagreed on the issue in a virtual three-way online meeting when it cited differences with the United States’ methods. Canada and Mexico use more flexible interpretations. Read more

“Mexico has identified a divergent position between our governments on the interpretation of (…) provisions on rules of origin for the automotive sector,” said Economy Minister Tatiana Clouthier in a letter.

In her letter to U.S. Trade Representative Katherine Tai on Friday, Clouthier said Mexico wanted to avoid or resolve a possible dispute.

The United States-Mexico-Canada Agreement (USMCA), successor to the North American Free Trade Agreement (NAFTA), requires 75% North American content for a vehicle to be considered from America North.

The same percentage will apply to so-called essential parts from July 1, 2023, against 69% currently, and against 62.5% under the previous commercial pact.

But once the level of essential parts reaches 75%, it is considered 100% and should be counted as such in the overall value of the automobile, according to Mexico.

His request for consultation is the first non-contentious step in a dispute settlement mechanism provided for in Chapter 31 of the pact, with an industry expert saying such discussions must take place within 30 days, in this case before September 20. .

The United States is reviewing the request, spokesman for U.S. Trade Representative Adam Hodge said.

“We are considering Mexico’s request for consultations and remain committed to fully implementing the USMCA, including the strict regional automotive content requirements that we all agree on,” he said.

Reporting by Sharay Angulo; Additional reporting by Andrea Shalal; Editing by Clarence Fernandez

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