LatinNews Daily - 14 January 2022

In brief: Canada backs Mexico in vehicle rules of origin dispute with US

* Mexico will be joined by Canada as complaining parties against the US interpretation of the automotive rules of origin under the US-Mexico-Canada Agreement (USMCA) on regional trade, Canada’s minister of small business, export promotion and international trade, Mary Ng, has confirmed. This means Canada will join Mexico’s request to establish a dispute settlement panel to resolve the differences of interpretation with the US. Mexico and Canada believe the interpretation that the US has adopted, under which 75% of a vehicle’s content and 75% of its “core parts” must be of North American origin in order for it to be sold in North America duty free, is inconsistent with USMCA. Both Mexico and Canada claim the agreement allows for more flexible calculation methodologies for reaching the 75% value. Once appointed, the dispute settlement panel would be expected to issue a report in the summer of 2022.

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