There’s common ground in NAFTA’s regional content issue, says Mexican official
Ildefonso Guajardo, secretary of Economy, said there is a common ground on a key objective of the United States in the North American Free Trade Agreement (NAFTA) talks, saying that the strengthening of regional content standards for automobiles offers an opportunity to achieve a victory for the three nations.
“The solution is undoubtedly a rule of origin reinforced in the regional automotive content,” Ildefonso Guajardo said Tuesday during a meeting of Mexican diplomats in Mexico City as reported by El Financiero. “The traceability list for some automotive components needs to be reconsidered in light of new technologies to send adequate signals about the strengthening of value chains in North America.”
Tracking means that it is necessary to demonstrate where certain auto components come from in order for a vehicle to be exempt from taxes under NAFTA.
The United States has proposed raising the so-called rules of origin from the current 62.5% to 85% of NAFTA content and requiring a new minimum content of 50% of the US.
Guajardo did not explicitly mention a minimum percentage of regional content higher in his description of a reinforced rule.
The Mexican Association of the Automobile Industry, known as AMIA, has said repeatedly that the minimum must be maintained at the current level.
Guajardo said the negotiators are close to completing the work in 10 of the 30 chapters of NAFTA, including energy and telecommunications, and that the talks in Montreal that will take place from January 23 to 28 will be decisive for the negotiation process. The process to agree on dispute resolution mechanisms will be more difficult, said Guajardo.