Canada will be an interested third party in discussions between the United States and Mexico over rules governing traded cars in North America, avoiding a direct confrontation with the Biden administration ahead of next month’s election while remaining concerned about the American position.

Mexico last week requested formal consultations with the United States to settle a dispute on how to measure regional content for cars to trade duty free. The United States insists on a more stringent method than what Mexico and Canada believe they have agreed upon for counting the origin of certain critical parts, including engines, transmissions and steering systems, in the overall calculation, said last month people familiar with the matter.

The US stance on the rules of the trade deal known as the US-Mexico-Canada deal could push automakers to abandon the region due to onerous and costly content requirements, Luz Maria de la Mora, Mexico’s Under Secretary of Economics for Foreign Trade, said in an interview this week.

“We know how important the auto industry is to Canadian workers and the Canadian economy,” Michel Cimpaye, spokesperson for the government’s global affairs department, said on Friday in an email response to questions. “Canada has notified the United States and Mexico of its intention to join the consultations as a third party. We continue to work with the industry on these and other important issues.

Bloomberg reported last month that Mexico, Canada and the automakers were all aligned against the Biden administration on the rules.


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