Canada joins Mexico in spat with US over car parts
MONTREAL, Jan 14, 2022 (BSS/AFP) - Canada said Thursday it is joining Mexico in challenging how the United States interprets auto sector rules under a revamped three-way trade deal.
Last week Mexico requested a dispute settlement panel to establish that Washington's interpretation of content requirements known as rules of origin are incorrect.
"Canada is joining Mexico's request to establish a dispute settlement panel," International Trade Minister Mary Ng said.
She said Washington's interpretation is "inconsistent" with the US-Mexico-Canada Agreement, which came into effect in July 2020.
The accord, which replaced the North American Free Trade Agreement, allows cars manufactured in North America to receive duty free treatment.
The dispute centers on how parts and components not originating in North America are treated under the rules, Mexico said, adding that several months of consultations had failed to resolve the spat.
The trade pact signed by then US president Donald Trump raised the regional content requirement for vehicles to 75 percent from the 62.5 percent threshold under NAFTA.
"Canada is optimistic that a dispute settlement panel will help ensure a timely resolution of this issue," Ng said.
Under the accord, the panel is expected to publish a report by this summer.
Canada and Mexico are also irked by what they call the protectionist US policy on development of electric vehicles, saying it hurts their industries.