Rules of origin to be ‘inevitably’ reviewed in NAFTA renegotiation
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Mexico, United States and Canada will ‘inevitably’ review the rules of origin when renegotiation of the North American Free Trade Agreement take place, said Foreign Relations Secretary Luis Videgaray said at an event in Miami according to Associated Press.
The rules of origin indicate how much U.S. or Canadian content a product assembled in Mexico must have in order to aviod tariffs when being exported to its NAFTA partners. Currently set at 62.5% for the auto industry, a figure that could increase.
“One part that must inevitably be reviewed is the chapter on rules of origin,” Videgaray said at the University of Miami.
“Over time, the free trade agreement has sometimes been used, not always of course, but sometimes as a way to access the US market perhaps with laxity in some ways of rules of origin,” the Mexican official added.
Annual trade of goods between Mexico and the United States totaled US$ 525 billion in 2016, with a deficit for the U.S. of more than US$ 63 billion.