Mexico, Canada Win Auto Parts Dispute with US

Photo: Google


One year after having filed a formal complaint against the United States for violating the rules of the United States-Mexico-Canada Agreement (USMCA) and just one day after the trilateral North American Leaders’ Summit, Mexico and Canada won their battle with Washington over the definition of automotive parts content on Wednesday, Jan. 11.

After months of review, a special dispute panel sided with Mexico and Canada in their claims that the U.S. interpretation of the ruling was overly rigid and discriminatory against auto part manufacturers north and south of the U.S. border.

The panel ruled that the U.S. interpretation of the USMCA regulations regarding automotive part content was “inconsistent” with the trade pact.

In accordance with the USMCA, the United States must now come to an agreement with Canada and Mexico on how to apply the panel decision or face possible retaliatory tariffs.

Under the USMCA, 75 percent of a vehicle’s components must originate in North America to qualify for a tax break, but the United States disagreed with Mexico and Canada on how to calculate that figure.

Leave a Reply