The Mexican government has requested the establishment of a dispute settlement group under the US-Mexico-Canada Free Trade Agreement because it claims that the US has improperly interpreted the stricter regional content rules under the agreement
MEXICO CITY-On Thursday, the Mexican government requested the establishment of a dispute settlement group under the United States-Mexico-Canada Free Trade Agreement because it claimed that the United States had improperly interpreted the stricter regional content rules under the agreement.
The agreement is called USMCA and will increase the required area content to 75% of the vehicle value or component. According to the old NAFTA agreement, the threshold was 62.5%.
Many Asian and European automakers have established factories in Mexico, sometimes importing parts and components from outside North America.
In December of last year, Mexico threatened to take legal action against the purchase of union-made electric cars made in the United States of up to $12,500 in subsidies.
At the same time, the United States is worried that Mexico is trying to favor its own state-owned power plants.
In November last year, Ken Salazar, the U.S. ambassador to Mexico, stated that the U.S. “expressed serious concerns” about the Mexican government’s attempts to limit competition in the power industry.
Mexican President Andrés Manuel López Obrador earlier this year proposed to amend the constitution to limit the market share of private generators and benefit Mexico’s state-owned utility companies.