Mexico must comply with USMCA deal and they are scrambling for alternatives

quote:

---

It’s amazing how the results of a USA election can almost instantly change the behavior of multinational corporations and the governments’ they bribe.

First, it’s worth remembering that in the fine print of the USMCA deal, Mexico and Canada must comply with North American parts origination for anything they want to manufacture for sale into the United States. Meaning, all trade manufacturers must either create their component parts domestically, or purchase them from the U.S, Mexico and Canada. It’s the core point of the USMCA trade agreement.

Secondly, in an aspect exclusive to the U.S. part of the deal that President Trump and USTR Lighthizer insisted upon, if either Canada or Mexico are deemed to be non-compliant with the agreement, the USA can cancel/override any trade agreement Mexico or Canada have with another nation. It’s a heavy accountability hammer securing the gate into the massive USA market.

---

quote:

---

Mexico gained tens of thousands of jobs when U.S. and foreign automakers moved their plants to Mexico under the free trade pact to take advantage of much lower wages. But the idea that Chinese parts — or even whole cars — could be piggybacking on that arrangement to further hollow out the U.S. auto industry has enraged some people north of the border.

---