Urgent to Defend Mexico’s Automotive Industry: CCE

The Business Coordinating Council (CCE) urged Mexican companies to prepare to defend the automotive industry, which he qualified as “the driver of growth” for the Mexican economy. The call to action followed misunderstandings between the US and Mexico regarding the rules established in the USMCA for the auto sector.

“The automotive industry is the driver of growth of the economy and represents the most important part of Mexican exports. Those days in which oil was the most important part of what we sold abroad are gone, and therefore it deserves that we take priority over that,” said Carlos Salazar Lomelín, President of CCE.

Broadly speaking, the main problem between Mexico and the US is a disagreement calculating the Regional Value Content (RVC) of vehicles manufactured in North America. “(Lately) there has been enormous publicity and attention on labor issues, but we have lost sight of a very important matter that we have to consider and resolve: the controversies, disputes and differences of criteria that we have had in the automotive industry,” said Salazar on a video message. Earlier this month, Mexico took the first step towards a possible solution, formally requesting its counterpart to enter in consultancies phase, which is the first non-contentious mechanism to solve this kind of controversies.

CCE established conversations with automakers operating in the US, which agree with the position of Mexico and Canada, that understand USMCA’s rule as a progressive increase in RVC up to 75 percent, which will be considered as 100 percent of regional content, said Salazar.

Tatiana Clouthier, Minister of Economy, sent the letter to begin with the consultancy phase back on August 20. There is a 75-day period for both sides to resolve the controversy. But in case that does not happen, there are more steps to follow, explained Salazar, such as calling a panel of independent specialists from all three countries to meet and take a decision. “If we could not agree on the consultancy mechanism, we still have another one, which is to call a panel of specialists. These panels were defined since the USMCA was integrated and there is a list of panelists in the US, where they chose Mexicans, and Mexicans chose Americans; and Canadians do something similar. If we could not agree, the specialized independent people will give the final criterion,” he said.