Mexico seeks panel to resolve US auto trade spat

MEXICO CITY: Mexico on Thursday requested a dispute settlement panel under a revamped North American trade deal to resolve a difference of interpretation with the United States in the auto sector, the government said.

The Latin American nation aims to establish that Washington’s interpretation of content requirements known as rules of origin are incorrect, the economy ministry said.

The framework allows cars manufactured in North America to receive duty free treatment under the US-Mexico-Canada Agreement, which entered into force on July 1, 2020.

The dispute centers on how parts and components not originating in North America are treated under the rules, the ministry said, adding that several months of consultations had failed to resolve the spat.

The trade pact signed by former US president Donald Trump raised the regional content requirement for vehicles to 75 percent from the 62.5 percent threshold under the North American Free Trade Agreement (Nafta), which it replaced.

The US government on Tuesday claimed victory in the first dispute under the new trade pact, saying it had won its fight with Ottawa over restrictions in the Canadian dairy market.

Washington has also used the provisions to pressure Mexican auto factories to protect workers’ rights to organise.

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