Both Canada and Mexico are complaining against the U.S. interpretation of USMCA trade pact

Mexico is celebrating its support in a complaint filed against the U.S. for its interpretation of the rules of origin in the automotive industry. On Thursday, Canada announced its intention to join Mexico’s complaint.

In a Thursday statement, Trade Minister Mary Ng announced it has joined Mexico’s complaint against the United States, said Mexico’s Secretary of the Economy, Tatiana Clouthier.

Last month, Mexico requested a dispute resolution panel under the terms of the trade pact between the United States, Mexico and Canada to clear up disagreements over how to apply automotive sector content requirements under the treaty.

The CUSMA, which replaced the North American Free Trade Agreement (NAFTA) in July 2020, says 75 per cent of a vehicle’s components must originate in the three nations to qualify for tax-free status, up from 62.5 per cent under NAFTA.

On December 2, Mexico made the complaint against the United States threatening “all kinds of commercial retaliation” if they approve tax credits for electric vehicles manufactured there since only 50 percent of the battery parts originate in the United States.

“The interpretation that the United States adopted … is inconsistent with CUSMA and the understanding shared by the parties and stakeholders throughout the negotiations,” Ng said in a statement.

Source: Excelsior

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