Mexico would decide in December arbitration against the US on cars

Mexico will likely decide before December whether to submit to arbitration with the United States over the interpretations of the rules of the trade agreement between the United States, Mexico and Canada on the origin of certain auto parts, said a high trade authority.

The conflict, which is not on the agenda of this week’s meetings between leaders of the three countries in Washington, centers on how to calculate the percentage of a vehicle that collectively comes from North America.

There is a probability of “50-50″ For Mexico to go to arbitration, said Luz María de la Mora, undersecretary of Foreign Trade, in an interview on Wednesday while traveling to the summit. He indicated that they were still doing the analysis.

The United States is pushing for a stricter interpretation of the trade agreement, known as the T-MEC, which would make it difficult for manufacturers based in Mexico and Canada to comply with its terms.

Mexico sought formal consultations on the matter in August and has warned that automakers could leave the region if the stricter US reading is applied.

Mexico managed to have support from Canada and is working with its government, he said. De la Mora indicated that Canada has shown interest in participating as a third party, so they are exchanging information.

In a letter Wednesday, the Canadian Chamber of Commerce and its Mexican counterpart, the Business Coordinating Council, expressed apprehension at the U.S. interpretation, stating that it could pose risks to integrated supply chains. The groups called on governments to involve companies in a “meaningful dialogue”.