Mexico to review rules of origin to help NAFTA renegotiation

5/30/2017 The Washington Post

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Flickr/Grupo Parlamentario del PRI. Cámara de Diputados

MIAMI — Mexico’s foreign minister says the country is “inevitably” set to review rules of origin when renegotiating the North American Free Trade Agreement, giving a boost to President Donald Trump’s manufacturing push.

Foreign Relations Secretary Luis Videgaray said on Tuesday at an event in Miami that NAFTA has allowed Mexican industry to enter the U.S. market with lax rules of origin. The rules dictate how much U.S. content a product assembled in Mexico must have in order to escape tariffs when being imported into the United States. Currently set at 62.5 percent for the auto industry, that number could increase.

“One part that must inevitably be reviewed is the chapter on rules of origin,” Videgaray said at the University of Miami. “Over time, the free trade agreement has sometimes been used, not always of course, but sometimes as a way to access the U.S. market perhaps with laxity in some ways of rules of origin.”

The Trump administration told Congress earlier this month there would be 90 days of consultations on the renegotiation of the 23-year-old pact before beginning talks with Canada and Mexico. Annual trade of goods between Mexico and the U.S. was at $525 billion in 2016, with the U.S. running a trade deficit of more than $63 billion.

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