A trade dispute resolution panel sided with Mexico and Canada side vis-a-vis the United States over the rules of origin for cars shipped across regional borders, which could create more incentives for manufacture auto parts in those countries.
The panel, created under the Treaty between Mexico, the US and Canada (USMCA), issued a preliminary ruling on November 14, according to people familiar with the decision who declined to be identified because the report has not yet been made public.
Nations will be able to provide feedback on the report before a final version is released in 30 days.
The Ministry of Economy and the US Trade representative did not immediately respond to requests for comment. A spokesman for Canada’s Trade Minister Mary Ng declined to comment. until the opinion is published.
What was the disagreement between Mexico and Canada with the US about?
Mexico first requested the panel’s help in resolving the conflict in January. The dispute centers on the different interpretations of nations on how to calculate percentage of a vehicle which comes collectively from the three countries under USMCA, which replaced the North American Free Trade Agreement, also known as NAFTA.
Both Mexico and Canada believe that the USMCA stipulates that a higher percentage of regionally produced parts should be considered for duty-free shipping than the US wants to allow.
Motor vehicles are the main manufactured product traded between the three countries.