Canada has joined Mexico in requesting a panel to resolve disputes over rules of origin in the US auto sector.
Through her social networks, the Secretary of the Economy, Tatiana Clouthier, celebrated Canada’s decision and assured that “together we will defend the competitiveness of this regional industry.”
As will be recalled, on January 6, Mexico requested the establishment of a T-MEC dispute settlement panel to resolve the difference in interpretation with the United States and the application of the rules of origin in the automotive sector in accordance with what established in Article 31.4.
Our Mexican government denounced that the United States imposes requirements on automotive producers that are incompatible with the T-MEC in order to calculate the Regional Content Value (VCR) of passenger vehicles, light trucks and their parts.
With this, the Secretary of Economy pointed out, the United States prevents automobile producers from applying provisions so that the vehicle is considered originating and is a candidate to obtain the tariff benefits of the Treaty.
For this reason, Canada joined the request of the Mexican panel in considering that the interpretation that the United States adopted in July 2020 is inconsistent with the T-MEC and the understanding shared by the interested parties throughout the negotiations.
The dispute resolution panel is expected to issue a report on the situation next summer.
Meanwhile, and through a statement, Canadian Trade Minister Mary Ng pointed out that Canada, Mexico and the United States (the three partners of the T-MEC) would benefit from the certainty that NAFTA is being implemented as negotiated, and Canada is optimistic that a dispute resolution panel will help ensure a timely resolution of this issue.”
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