UPDATE 1-Mexico expects dispute panel with the US on automotive sector rules in TMEC to resolve in the third quarter

January 15, 2022

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MEXICO CITY, Jan 14 (Reuters) – Mexico hopes that the dispute resolution panel that requested the interpretation of the United States to the rules of origin of the automotive sector in the framework of the trade agreement for North America, the TMEC, will resolved in the third quarter of the year, the Secretary of Economy said on Friday.

The Mexican government last week requested the establishment of a panel to resolve its differences with the United States on the issue, to which Canada joined this week.

“The panel, we believe, should be resolved throughout this year. It is not an expedited process and we will be having results, hopefully by the third quarter,” the secretary, Tatiana Clouthier, told the Milenio TV channel.

Under the trade pact, 75% of a vehicle’s components must originate in North America to qualify as duty-free, up from 62.5% under NAFTA, which was superseded by the TMEC in 2020.

The two partners of the United States are in favor of a more flexible interpretation of the regulations of the trade agreement and assure that Washington’s reading is inconsistent with the TMEC.

(Reporting by Adriana Barrera)