Mexico stands in disagreement with the United States over its application of content rules for the auto trade of the region, according to Friday’s statement of Tatiana Clouthier, the Economy Minister of Mexico.
The disagreement put forward by Mexican authorities revolves around the duty-free treatment of cars manufactured in the North American continent. This treatment is also known as content requirements, according to reports from AFP.
The content requirements were established under the US-Mexico-Canada Agreement, a region agreement of the three countries for fluent trade practices. The pact came into effect around a year ago.
In a statement to reporters, Clouthier said, “We believe that the rules of origin have not been interpreted the way it was agreed at the moment we signed the agreement”, according to reports from AFP.
The US-Mexico-Canada Agreement (USCMA) signed by former US President Donald Trump raised the regional content requirement for vehicles to 75% from the 62.5% threshold under the North American Free Trade Agreement (NAFTA), which it replaced.
Clouthier met on Thursday with US Trade Representative (USTR) Katherine Tai to discuss the issue just after the anniversary of the deal’s implementation, but indicated the sides had not resolved their disagreement, according to reports from AFP.
“We need more dialogue,” she said at a press conference.
She also released a statement warning that “not abiding by USMCA rules may potentially disrupt the operations of the North America automotive industry and will result in unnecessary burdens” for the manufacturers and “reduced competitiveness.”
The United States Trade Representative said in a statement after meeting the Mexican officials United States will continue to show its commitment towards the USMCA, including the auto rules, according to reports from AFP.
Robert Lightizer, the United States Trade Representative in the administration of former President Donald Trump, projected the new pact as a beneficial element for the country’s automobile industry.
