The US is insisting on a stricter way than what Mexico and Canada say they have agreed to for accounting for the origin of certain core parts, including engines, transmissions and steering systems. The US interpretation makes it harder to reach the threshold for vehicles to be exported duty-free to the United States, which has by far the largest consumer market of the three nations.
“Everyone except the United States government agrees that we are negotiating something else,” the economy secretary said Wednesday in an interview in Los Angeles. Clouthier, 57, said he was told by the US Trade Representative’s office that they “have no political leeway” to work with the Trade Agreement as negotiated.
Automobiles and auto parts are key elements of North American trade, accounting for the lion’s share of the more than $1 trillion in goods that cross the borders of the three nations annually.
Mexico sees the stricter interpretation by the Biden Administration as a stealthy attempt to renegotiate a key aspect of the Agreement meticulously crafted during the Donald Trump administration.
The United Auto Workers, the largest US union in the industry, supports the US’s stricter interpretation of the USMCA Since the beginning of his term, Biden has sought to create friendly ties with the country’s labor unions, a key part of his electorate, in an effort to mobilize the Democratic base ahead of midterm legislative elections in November, as the party is in danger of losing its majority in the House and control of the Senate.
Democrats have also pushed for incentives for electric vehicles made by unionized US workers, drawing outrage from Canada and Mexico, who say this plan would undermine regional integration and violate USMCA by discriminating against factories in their markets. countries.
Regarding the Rules of Origin of the automotive sector, “the US has not given us, and this is important, it has not given us a technical comment” to explain why Mexico’s position is incorrect, Clouthier said during the interview. The official expressed confidence that the panel will side with Mexico and Canada.
