Automotive industry

Mexico to seek expert panel to resolve auto dispute with US, Auto News and ET Auto

Mexico favors a more flexible interpretation of auto industry regulation than the United States, which has called for an overhaul of NAFTA to protect US manufacturing jobs.

Mexico plans to seek arbitration from a panel of experts to resolve a latent dispute with the United States over the interpretation of rules of origin in the auto industry, three people familiar with the matter said Tuesday.

Mexico would like the expert group to clarify its differences with the United States on how to apply automotive content requirements under the United States-Mexico-Canada Agreement (USMCA), which under- trending trade in North America.

Mexico’s Economy Ministry, which has taken a firm stand with the United States in the auto dispute, did not immediately respond to a request for comment on its plans.

Using the panel would escalate the fight over auto content rules, which were at the heart of former US President Donald Trump’s drive to replace the North American Free Trade Agreement (NAFTA) with what has become the USMCA. Mexico favors a more flexible interpretation of auto industry regulation than the United States, which has called for an overhaul of NAFTA to protect US manufacturing jobs.

US unions argue that jobs have migrated to lower-cost Mexican factories since NAFTA came into effect in 1994. On August 20, the Mexican government requested that the United States initiate formal consultations on the dispute. . Under USMCA rules, if no agreement is reached within 75 days of the request, the case is referred to the panel.

A panel is generally made up of five members chosen from a list of people previously established by the signatories of the agreement. If desired, a panel of three can be agreed. The Mexican government said this month that it has begun formal consultations with the United States on the interpretation of the rules. Canada has also disagreed with the United States on how auto rules are enforced under the USMCA.

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