EXCLUSIVE Mexico seeks expert panel to resolve auto disputes with US sources

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Flags of Mexico, the United States and Canada are pictured at a security booth at the Zaragoza-Ysleta border crossing bridge in Ciudad Juarez, Mexico, January 16, 2020. REUTERS / Jose Luis Gonzalez

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MEXICO CITY, Oct. 26 (Reuters) – Mexico plans to arbitrate a panel of experts to resolve a simmering dispute with the United States over the interpretation of rules of origin in the automotive industry, three people familiar with the matter said Tuesday.

Mexico would like the panel to resolve its disagreement with the United States over the application of the content requirements for the automotive sector under the United States-Mexico-Canada Agreement (USMCA) underpinning trade in North America.

The Mexican Ministry of Economic Affairs, which has taken a firm stand in the car dispute with the United States, did not immediately respond to a request for comment on its plans.

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Using the panel would escalate the dispute over the automobile content rules that were at the center of former US President Donald Trump’s efforts to replace the North American Free Trade Agreement (NAFTA) with what became the USMCA.

Mexico favors a more flexible interpretation of auto industry regulations than the United States, which sought to revise NAFTA to protect US manufacturing jobs.

US unions argue that since NAFTA went into effect in 1994, jobs have been relocated to lower-cost Mexican factories.

The Mexican government asked the United States on August 20 to open formal consultations on the dispute.

Under USMCA rules, if no agreement is reached within 75 days of the request, the matter will move to the panel of experts.

A body generally consists of five members, drawn from a list of people previously drawn up by the signatories to the agreement. A group of three can be arranged on request.

The Mexican government announced earlier this month that it had entered formal consultations with the United States on the interpretation of the rules. Canada has also argued with the United States over how the USMCA car rules are applied.

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Reporting by Sharay Angulo and Dave Graham; Editing by Chizu Nomiyama, Paul Simao and David Gregorio

Our standards: The Thomson Reuters Trust Principles.


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