Car manufacturers in Mexico seek ways to comply with the T-MEC
The car manufacturers installed in Mexico hold a dialogue with the government of the country in search of ways to comply with the rule of origin required by the renewed free trade agreement, reported Monday the Mexican Association of the Automotive Industry (AMIA).
The president of the AMIA, Eduardo Solis, described in a press conference as "very harsh" and "very complex" the new rule of the Treaty between Mexico, the United States and Canada (T-MEC), which brings 62.5% to 75% the regional threshold of automotive content to have the right to free trade.
He warned that compliance could be difficult for some companies.
"We have asked the federal government to work with us so that these brands can achieve these commitments of the new rule as soon as possible," said the leader without offering details about the manufacturers.
"It is a constructive dialogue with the government, they are listening to us and we are putting on the table the reality with which the industry is moving today".
Solís trusted that the Parliament of Canada and the United States Congress will ratify that treaty as soon as possible, which seeks to replace the North American Free Trade Agreement (NAFTA), in force since 1994.
On June 19, Mexico became the first country to approve the T-MEC with its ratification in the Senate, but the approval of its members' legislatures is still required for the agreement to take effect.
The Latin American country is home to manufacturers such as the US Ford and General Motors; the Japanese Honda, Mazda, Nissan, and Toyota; the German Audi and Volkswagen; the South Korean KIA and the Italian-American fusion Fiat Chrysler.
Mexico is the main supplier of light vehicles in the United States.
The Canadian ambassador in Mexico, Pierre Alarie, considered it very unlikely, almost impossible, that the Senate of his country could hold sessions to ratify the new Free Trade Agreement between Mexico, the United States and Canada (T-MEC) before the elections on October 21.
He recalled that the sessions of the Parliament concluded last week, but there is the option of a special meeting to convene during the summer, although he acknowledged the difficulty of it due to the start of the campaigns for that country's elections on October 21st.
At the headquarters of the Mexican chancellery, in the context of the unveiling of a National Lottery ticket alluding to the 75 years of relations between Mexico and Canada, he reiterated that in that nation there is a consensus in favor of the T-MEC.
Accompanied by the undersecretary of Foreign Affairs for North America, Jesus Seade, and the director of the National Lottery, Ernesto Prieto, the ambassador mentioned that in Canada the ratification process is underway because the second reading has already passed in Parliament and is pending. the Senate.
In this regard, he explained that the prime minister has the authority to convene a special session for his vote during the summer, but because of the election issue "it is very unlikely, almost impossible."
He recalled that the recent visit of the Prime Minister of Canada, Justin Trudeau, to Washington, United States, was to send a very important message at the political level that our country is very interested in marching trilaterally with its two neighbors.
Therefore, he said, we trust that the next four or five weeks will be ratified in the United States Congress.
On the theme of Mexico's program of support for Central America to strengthen the economy and mitigate the issue of migration, he assured that the Canadian government is interested in solving the current crisis but also in the long term.
"Our foreign minister said Canada wants to be part of this and support, help with assistance programs for Central America."
T-MEC approval in Mexico reduces commercial uncertainty
The reduction of uncertainty due to the approval of the T-MEC opens greater possibilities for Banxico to start a cycle of low-interest rates in the second part of this year.
The approval in the Mexican Senate of the new Treaty between Mexico, the United States and Canada (T-MEC) is an important step to diminish the uncertainty in commercial matters, but this does not imply that new threats to the country on this front are discarded, considered Grupo Financiero Banorte.
He said that on June 19 the Mexican Senate approved the new T-MEC with 114 votes in favor, four against and three abstentions, which only remains the approval of the agreement by the other two business partners, with focused attention in the evolution of the process in the United States.
Thus, the United States is expected to approve the treaty towards the end of this year, but without ruling out that it faces delays in the Legislative of that country before the difficult political conjuncture facing the presidential election of 2020.
The financial institution considered in an analysis that the reduction of uncertainty due to the approval of the T-MEC opens greater possibilities for the Bank of Mexico (Banxico) to initiate a cycle of low-interest rates in the second part of this year.
"We believe that the eventual reduction of uncertainty will be positive for Banxico to find the necessary conditions to cut its reference rate by 25 basis points, in its decision on November 14," from its current level of 8.25 percent.
T-MEC will boost Mexico's growth, highlights the Treasury
The Treaty between Mexico, the United States and Canada (T-MEC), approved this Wednesday by the Mexican Senate, will help the competitiveness of the Mexican economy, enhancing its growth, emphasized Finance Secretary Carlos Urzúa Macías.
This commercial agreement will give certainty to the investment and will promote the participation of Mexican companies in global value chains.
The Mexican Senate is the first to approve the trade agreement with the United States and Canada, which represents more than 1.2 billion dollars in trade, to the benefit of 500 million consumers in North America.
After two hours of discussion, in a single act, the Senate of the Republic ratified in general and in particular, with a nominal vote of 114 votes in favor, four against and three abstentions, the agreement that replaces the Free Trade Agreement. of North America (NAFTA).
After the ratification of the treaty of the new trade agreement with the United States and Canada (T-MEC) in the Chamber of Senators, President Andrés Manuel López Obrador stressed that it is a sign of unity in the country.
In March of last year, the United States imposed tariffs on imports of steel and aluminum, of 25 and 10 percent, respectively, alleging issues of national security. Although initially excluding Mexico and Canada, from June both nations were also forced to pay the tariff.
The United States, Mexico, and Canada signed the US-Mexico-Canada Agreement (T-MEC) last November after more than a year of tough negotiations initiated at the behest of President Donald Trump, who had described the old trade agreement as "a disaster" for the US.