Montreal Gazette

Canada joins Mexico in fight over U.S. vehicle rules

- ERIC MARTIN Bloomberg

Canada plans to formally join Mexico in calling for an arbitratio­n panel to resolve a dispute with the U.S. over how to interpret rules governing the origin of vehicle parts.

The two countries expect to request in the first days of January the creation of a tribunal of experts to rule on the matter as allowed under the U.s.-mexico-canada Agreement, known as USMCA, according to three people familiar with the plans. The individual­s spoke on condition they not be identified because they aren't authorized to speak publicly on the issue.

Canada Trade Minister Mary Ng's office didn't immediatel­y respond to requests for comment.

The panel will be tasked with deciding whether the U.S. applicatio­n of the content rules, known as rules of origin, is inconsiste­nt with the trade pact. The experts would outline measures to be taken if a violation is found.

Canada and Mexico can seek the formation of a three- or five-member panel chosen from a roster of legal and trade experts previously agreed to under USMCA. The panel process would be finished at earliest the start of July 2022, based on timelines laid out in the trade deal, according to an August report from attorneys from White & Case.

The panel is the next step allowed under the dispute resolution mechanism of the trade agreement, after discussion­s between Mexico and the U.S. failed to settle the disagreeme­nt.

It would also represent an escalation for Canada, which has said it had only been monitoring talks between its two trading partners as an interested third party.

But Prime Minister Justin Trudeau has faced pressure from business leaders — particular­ly from the nation's car industry — to become more aggressive against what Canadians sees as growing U.S. trade protection­ism.

 ?? COLE BURSTON/BLOOMBERG ?? Canada and Mexico are upset over U.S. auto parts rules.
COLE BURSTON/BLOOMBERG Canada and Mexico are upset over U.S. auto parts rules.

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