Mexico requests the establishment of a T-MEC Dispute Settlement Panel

#Mexico City. – On August 20, 2021, Mexico formally requested consultations with the United States to resolve the difference in the interpretation and application of the rules of origin in the automotive sector in accordance with Article 31.4 (Consultations) of the Agreement between Mexico, the United States and Canada (T-MEC). Canada also participated in the consultation process.

The consultation stage did not lead to a resolution of the dispute, and Mexico today filed a request for the establishment of a panel under paragraph 1 of Article 31.9 (Establishment of a Panel) of the T-MEC to determine that the interpretation and application by the United States of the provisions of Chapter 4 (Rules of Origin) and the Uniform Regulations of the T-MEC are incorrect.

The United States imposes requirements on automotive producers that are inconsistent with the T-MEC for purposes of calculating the Regional Value Content (RVC) of passenger cars, light trucks and their parts. In particular, Mexico considers that the various provisions of the Appendix to Annex 4-B of the T-MEC (Automotive Appendix), provide automotive producers with different methodologies that allow them to consider non-originating parts and components in the calculation of the RCV, and thereby ensure that the vehicle is considered originating for purposes of obtaining the tariff benefits of the Agreement. The United States does not agree with this position and does not allow automobile producers to benefit from these methodologies.

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