Mexico is preparing to escalate its auto content dispute with the United States, the minister says Reuters

© Reuters. File picture: On January 11, 2021, Mexican Economy Minister Tatiana Clouthier said in an interview with Reuters in Mexico City, Mexico. REUTERS/Dave Graham

Shari Angulo

Mexico City (Reuters)-Mexican Economy Minister Tatiana Clouthier said on Thursday that she is working with the auto industry and the Canadian government to determine when to convene an arbitration panel https://www.reuters.com/business/autos-transportation/ exclusive-mexico-seek-expert-panel-fix-auto-dispute-with-us-sources-say-2021-10-26 Resolve disputes with the United States regarding automobile content rules.

Mexico requested the U.S. government in August to start formal negotiations on a dispute over rules, which were agreed upon in the U.S.-Mexico-Canada Agreement (USMCA).

But Clouthier said that Washington’s position has not changed.

“In our view and Canada’s view, the U.S. government’s interpretation is wrong,” Krauter told lawmakers in Mexico’s Congress.

“We are about to start the next phase… We are working with the automotive industry and Canada to determine the right time to start the group.”

The use of this panel will escalate the debate over the car content rules, which is the core of former US President Donald Trump’s replacement of the North American Free Trade Agreement (NAFTA) with the later USMCA.

Compared with the United States, Mexico prefers a more flexible interpretation of automotive industry regulations, which seeks to reform the North American Free Trade Agreement to protect employment opportunities in the US manufacturing industry.

The US union believes that since the North American Free Trade Agreement first came into effect in 1994, jobs have been transferred to lower-cost Mexican factories.

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