The dispute that pits Canada and Mexico against the U.S. on the interpretation of regional trade rules for automobiles should end in a decision very soon, according to the Canada Minister of International Trade Mary Ng.
Canada has joined Mexico in a dispute against the United States over how to apply automotive sector content requirements under the United States-Mexico-Canada (USMCA) free trade agreement, which went into effect in 2020.
Under USMCA, which replaced the North American Free Trade Agreement (NAFTA), 75% of a vehicle's components must originate in the region to quality for tax-free status. Mexico and Canada seek a more flexible interpretation of the rules than Washington.
Ng did not comment on whether a decision would happen in 2022 or how it would turn out. She simply noted she hopes all involved see Canada’s understanding of the new trade agreement.
A separate dispute centers on energy and pits Ottawa and Washington against Mexico. Ng reported Canadian investors in Mexico's energy and mining sectors are concerned about steps taken by President Andres Manuel Lopez Obrador to tighten state control of energy and natural resources.
"It is really important that those investments that have been made here in Mexico are respected in accordance with our trade obligations," she told Reuters.
Ng also expressed hopes that Canada would be made an associate member of the Pacific Alliance, whose core members are Mexico, Colombia, Peru and Chile, in 2023.
Canada also has entered exploratory discussions with Ecuador over a potential free trade agreement, Ng said.
Originally posted on Auto Dealer Today