Canada joins Mexico in auto panel against the United States

Canada confirmed this Thursday that it will join Mexico as a claimant party against the US interpretation of the automotive rules of origin under Chapter 31 of the Treaty between Mexico, the United States and Canada (T-MEC).

The USMCA rules of origin for passenger cars and light trucks are intended to encourage production and sourcing in North America.

This was the result of close negotiations and consultations with stakeholders from the Automotive industry, which ensured that these new rules of origin would deepen regional integration and support the competitiveness of automakers in North America.

The rules of origin govern the regional value content calculations that must be made in order for a vehicle to qualify for carbon-free treatment. duty of the T-MEC.

“The interpretation that the United States adopted in July 2020 is inconsistent with the T-MEC and the understanding shared by the parties and interested parties throughout the talks”, said Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development of Canada in a press release.

Canada, Mexico and the United States would benefit from the certainty that the T-MEC it is being implemented as negotiated, and Canada is optimistic that a dispute resolution panel will help ensure a timely resolution of this issue.”

“The Government of Canada will always stand up for our auto industry and workers as we move toward a sustainable economic recovery,” added Ng.

Canada joined the consultations initiated by Mexico with the United States under Chapter 31 of the T-MEC in August 2021. The trilateral consultations were held on September 24, 2021.

So far, informal trilateral technical discussions have taken place after the entry into force in July 2020.

Mexico requested the establishment of a dispute settlement panel on this issue on January 6, 2022. In the schedule provided in the T-MEC, the dispute resolution panel is expected to issue a report in the summer of 2022.

For its part, the Secretary of Economy spoke about it. “I welcome Canada’s decision to join the Panel’s request,” Secretary of the Economy said later, Tatiana Clouthier on his Twitter account. “Together we will defend the competitiveness of this regional industry,” he added.

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