January 28, 2022

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As a new sign of trade tensions, Canada is about to report US actions in the automotive sector The world

Will join a controversy against For his explanation of how free trade should be used in the automotive industry on the continent, it is another indication of the erosion of relations between the two neighbors.

Canadian Trade Minister Mary Eng has said her country will join Mexico in seeking a dispute resolution committee under a trade agreement between Canada, the United States and Mexico. .

Canadians and Mexicans want to resolve disagreements over how to use automotive content requirements under the agreement, which came into force in 2020.

They also say they are not happy about the US-proposed tax breaks for US-based electric vehicle manufacturers because it could undermine America’s highly integrated automotive industry.

According to TMEC, 75% of a vehicle’s parts must be North American to qualify for tax-free from NAFTA to 62.5%.

Canada and Mexico support a more relaxed interpretation of the rules than Washington, which sought the NAFTA amendment to protect jobs in industry when Donald Trump was president.

“The interpretation accepted by the United States contradicts the TMEC and is an understanding shared by the parties and interested parties throughout the negotiations,” Ng explained in the statement announcing the decision.

The Ottawa column was shortly afterwards celebrated by Mexican Economic Secretary Tatiana Glutier. “Together we will protect the competitiveness of this regional industry,” he argued.

The Office of the United States Trade Representative expressed hope that its interpretation would be consistent with that of TMEC. Spokesman Adam Hodge said in an email that raw rules are essential to attract investment and create good jobs.

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But Flavio Wolf, president of the Canadian Association of Auto Part Manufacturers, said the U.S. approach could force manufacturers to use cheaper parts outside of North America and then accept the 2.5% fee the United States imposes on their vehicles.

He told the Canadian Broadcasting Corporation that US companies that supply about 55% of all auto parts used in North American production would suffer the greatest losses.