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Thursday, March 23, 2023

Canada to participate in Mexico-U.S. auto spat as third party

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Canada will be an interested third party in discussions between the U.S. and Mexico over rules governing cars traded in North America, avoiding direct confrontation with the Biden administration ahead of elections next month while still showing concern about the U.S. position.

Mexico last week requested formal consultations with the U.S. to settle a disagreement over how to measure regional content for cars to trade duty-free. The U.S. insists on a stricter method than Mexico and Canada believe they agreed to for counting the origin of certain core parts including engines, transmissions and steering systems in the overall calculation, people familiar with the matter said last month.

The U.S. position on the rules in the trade deal known as the U.S.-Mexico-Canada Agreement could push automakers to abandon the region due to cumbersome and costly content requirements, Luz Maria de la Mora, Mexico’s undersecretary of economy for foreign trade, said in an interview this week.

“We know how important the auto industry is to Canada’s workers and the Canadian economy,” Michel Cimpaye, a spokesperson for the government’s global affairs department, said in an emailed response to questions Friday. “Canada has advised the U.S. and Mexico that it intends to join the consultations as a third party. We continue to work with the industry on these and other important issues.”

Bloomberg reported last month that Mexico, Canada and automakers were all aligned against the Biden administration on the rules.


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