Canada joins Mexico in U.S. consultation on USMCA content rules

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A vehicle carrier transports freshly assembled vehicles from the FCA Windsor assembly plant in Windsor, Ontario, Canada, on October 5, 2018. REUTERS / Rebecca Cook

OTTAWA / MEXICO CITY, Aug. 27 (Reuters) – Canada joins Mexico in seeking formal consultation with United States on interpretation of car content rules set out in US trade pact , as reported Friday by Mexico and Canada.

On August 20, Mexico requested formal consultation on the interpretation and application of tougher content standards for automobiles under the United States-Mexico-Canada Agreement (USMCA), after expressing disagreement in May on the topic in a virtual meeting when he cited differences with U.S. methods. Read more

Canada and Mexico use more flexible interpretations.

“We know the importance of the auto industry for workers and the Canadian economy. Canada has informed the US and Mexico that they intend to join the consultations as third parties,” said Patricia Skinner, spokeswoman of Global Affairs of Canada.

Skinner said Canada continues to work with the auto industry on this and other important issues.

“We are pleased that Canada has decided to join the request for consultations, which we requested on August 20, in connection with the United States’ interpretation of the USMCA rules of origin for in the automotive sector, ”Mexican Economy Minister Tatiana Clouthier said on Twitter.

The USMCA, the successor to the U.S. Free Trade Agreement, requires that 75% of U.S. content be considered a vehicle to come from North America.

The same percentage will be applied to the essential parts from July 1, 2023, compared to the current 69% and compared to 62.5% of the previous trade agreement. Mexico argues that once the level of essential parts reaches 75%, it is considered 100% and should be counted as such for the overall value of the car.

The request for consultation is the first non-contentious stage of a dispute resolution mechanism provided for in the trade agreement.

Reports by Anthony Esposito in Mexico City and David Ljunggren in Ottawa; Edited by Leslie Adler Edited by Cassandra Garrison

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