(Updated on May 16th, 2018)

The Trump Administration wants Rules of Origin in the automotive industry to be national and not trinational. That is contrary to the spirit of integration of NAFTA and it is going to be opposed by Mexico and Canada.

Currently, NAFTA requires 62.5% of trinational integration (cost/parts).
TPP requires 55% on build-down method.

NAFTA 1.0 is already great for USA:

  1. It provides access to Mexican market duty-free for highly competitive agricultural and meat products such as corn, soybeans, rice, pork, meats, chicken and many tree-origin nuts, oils and fruits;
  2. Access to Mexican markets duty-free of US manufactured goods such as construction, industrial, electrical and mining machinery and equipment;
  3. Access to Mexican markets free of duties to natural gas, refined petrochemicals, etc.

For Mexico:

  1. NAFTA allows for 60% of autos and auto parts to be sourced in US/Canada while assembled in Mexico for re-export;
  2. Allows for duty-free export of oils;
  3. Allows for industrial logistic structures to be efficiently allocated for world trade.

And for Canada:

  1. NAFTA allows for oil trade with other NAFTA countries at 0% duty;
  2. Protects Canadian investments in natural resources in NAFTA markets;
  3. Allows Canada auto industry to remain competitive.

 

Are you wondering how your product or company is going to be affected by the NAFTA renegotiations?

Please let us know! You can get in touch with us here.

 

The content of this website is not or should not be considered as legal advice, the information displayed is for informative purposes only.


Daniel Gutiérrez

Daniel Gutiérrez

Managing Partner at GD Legal. Experienced at IP & Technology Law, Commercial, Real Estate, Ejido, Construction, Secured Financing, Insolvency, Customs, Tax and NAFTA.