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Mexico ready to escalate auto content dispute with United States, Minister says

A carrier trailer transports Toyota vehicles for delivery while queuing at the border for customs control to cross into the U.S., at the Otay border crossing in Tijuana, Mexico June 30, 2020. REUTERS/Jorge Duenes

MEXICO CITY, Nov.25 (Reuters) – Mexican Economy Minister Tatiana Clouthier said Thursday she was working with the auto industry and the Canadian government to determine when to call an arbitration panel to resolve a dispute with the United States on automotive content rules.

In August, Mexico asked the US government to initiate formal consultations on the dispute over the rules, which were agreed to in the United States-Mexico-Canada Agreement (USMCA).

But Clouthier said Washington had not budged in its position.

“The US government is misinterpreting, in our opinion and that of Canada,” Clouthier told Mexican congressional lawmakers.

“We are about to start the next step… We are working with the automotive industry and Canada to determine the right time to start the panel.”

Using the panel would escalate the fight over auto content rules, which were at the heart of former US President Donald Trump’s drive to replace the North American Free Trade Agreement (NAFTA) with what has become the USMCA.

Mexico favors a more flexible interpretation of auto industry regulation than the United States, which has called for an overhaul of NAFTA to protect US manufacturing jobs.

U.S. unions argue that jobs have migrated to lower-cost Mexican factories since NAFTA came into effect in 1994.

Our Standards: Thomson Reuters Trust Principles.

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