By CAPosts 22 January, 2021 - 06:30pm 36 views
The government of Mexico announced on Friday that it approved a request from 12 auto companies to extend the deadline to comply with the new regional content requirements established in the Agreement between Mexico, the United States and Canada (TMEC), which took effect in July.
TMEC establishes new rules of origin for automotive goods. Among them a higher Regional Content Value, essential auto parts requirements, purchases of steel and aluminum, as well as Labor Content Value.
Through a statement , the Ministry of Economy said that, under the new agreement, the companies requested an “Alternative Transition Regime” that extends the transition period to meet the goals
The request was granted to the following automakers:
Tesla, Inc.Volkswagen de MéxicoVolvo Car USAFCA MéxicoHyundai Motor AméricaMazda Motor de MéxicoToyota Motor de MéxicoKia Motors MéxicoKia Motors Manufacturing GeorgiaNissan MexicanaFord Motor CompanyCooperation Manufacturing Plant Aguascalientes The new TMEC rules are complex for automakers
For free trade in light vehicles in the region, the agreement requires 75% North American content. This is above the 62.5% threshold established in its predecessor, the North American Free Trade Agreement (NAFTA) .
In June of last year, the president of the Mexican Association of the Automotive Industry (AMIA), Fausto Cuevas, predicted that all automotive companies in Mexico would request this extension.
“Four requirements must be met for the vehicle to be considered original, the complexity of changing the methodology, procedures, and value chain systems is a very complex scheme ", Cuevas said at the time, as reported by Forbes .
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