Mexico wants talks with US over auto content rules

Mexico sought formal consultation with the United States on Friday over the interpretation and application of tougher content rules for vehicles set out in the USMCA trade pact.

In May, Mexico voiced disagreement over the issue in a three-way online virtual meeting when it cited differences with the United States' methods. Canada and Mexico use more flexible interpretations.

Tap Here to Add The Daily Star As A Trusted Source

"Mexico has identified a divergent position between our governments on the interpretation of ... provisions on rules of origin for the automotive sector," Economy Minister Tatiana Clouthier said in a letter.

In her letter on Friday to US Trade Representative Katherine Tai, Clouthier said Mexico wanted to avoid or resolve a possible dispute.

The United States-Mexico-Canada Agreement, the successor to the North American Free Trade Agreement, requires 75 per cent North American content for a vehicle to be considered as being from North America.

The same percentage will apply for so-called essential parts from July 1, 2023, up from 69 per cent now, and compared with 62.5 per cent under the previous trade pact.

But once the level of essential parts hits 75 per cent it is considered 100 per cent and should be counted as such towards the overall value of the automobile, Mexico says.