USA collides with Mexico and Canada at T-MEC for vehicles | The world

United States Disagree Mexico Y Canada Regarding the rules related to the export of cars between countries. Automakers and neighboring U.S. governments have pointed to the administration Biden This puts the success of a new business deal at risk.

There is disagreement on how to calculate the percentage of a vehicle that will jointly come from all three countries under an agreement between the United States, Mexico and Canada, those who are familiar with the matter, demanded anonymity. The agreement came into force last July, replacing the North American Free Trade Agreement, or TLCAN, But the rules of the new look are designed to be implemented gradually over three years.

Overall, people said, the United States insists on a more rigorous way than Mexico and Canada have agreed to count the appearance of certain important areas, such as machinery, transmissions and steering systems. It is harder for plants in Mexico and Canada to meet the new threshold of 75% more than NAFTA’s 75% regional content, people said, adding that people can trade in a duty-free form.

For example, Mexico and Canada argue that if a federal party uses 75% regional content and qualifies under this requirement D-MEC For the purposes of a comprehensive calculation of the overall regional content of a car, this figure is allowed to be around 100%. However, the United States argues that 75% is the percentage to be used in the broader calculation, which is difficult to achieve with the general tax-free limit.

They summarize the issue in a note written by Bloomberg News and written by the Mexican Automobile Industry Association, also known as AMIA.

Adam Hodge, a spokesman for the U.S. Trade Representative, said in an email that “the United States is committed to the regional value requirements agreed upon by countries under the D-MEC.”

The Press Office for the Ministry of Economy of Mexico declined to comment immediately. A spokeswoman for Canada’s Minister of Commerce, Mary NG, declined to comment.

Katherine Tai, the US trade representative appointed by President Joe Biden, has repeatedly stated in recent weeks that the administration is pursuing a “labor-centric” trade policy and seeking friendly relations with the unions in the United States. Last month, it addressed the largest labor federation in the United States, calling its director a historic first.

United Auto Workers spokesman Brian Rodenberg said in an email that the group, the largest auto union in the United States, supported the Biden management’s harsh interpretation of the D-MEC.

Surprising posture

As for Mexico, the demand of the Biden administration is surprising because people said that the country believed that the issue would be resolved in talks with then-President Donald Trump’s administration in 2018 and 2019. Cars are the central theme of the T-MEC, and people commented that Mexico sees the need for the United States as an attempt by the Biden administration to reconsider a key aspect of the deal.

Mexico, along with Canada, is considering filing a formal lawsuit against the United States under the D-MEC, which has only been in place for one year. People said it could cause a controversy group to hear the countries’ arguments.

People reported that Mexican Economic Secretary Tatiana Clutier and Canadian Marie Ng discussed the conflict with Thai when they met in Mexico City last week. Cloutier plans to visit Washington next week to find out about the problem with Toy.

Flavio said if the rules become too strict, automakers could abandon duty-free standards and instead pay the 2.5% fee charged by the United States under WTO rules. Wolf, president of the Association of Automotive Parts Manufacturers of Canada, said. The COVID-19 epidemic forced the auto industry to shut down last year and is now mired in a vehicle chip shortage crisis.

Wolpe said the interpretation of the Biden administration’s rules of origin “does not match the tripartite consensus on how the new rules will be governed”. “His explanation is that it is difficult for automakers to reach acceptable regional minimums for content value.”