Mexico aims to safeguard auto industry, opposes trade talks image

In short, the Central American country is worried the new Trans-Pacific Partnership now being negotiated might endanger its position as the second largest auto exporter to the United States.

At the end of July the officials from the 12 countries discussing the Trans-Pacific Partnership ended a week of negotiations in Hawaii at the end of July without agreeing on a deal – and they pointed out toward Mexico’s economy minister, Ildefonso Guajardo. He is attempting to safeguard its country’s interests – which had tremendous gain from the North American Free Trade Agreement, a deal that tore down the duties on goods shipped between Canada, Mexico, and the US. Ford, GM, Chrysler (now FCA) all went and took advantage of the duty-free access back to the US and Mexico’s very low salaries to establish production bases. European and Japanese automakers all did the same. And since last year Mexico is the second biggest exporter of vehicles to the United States, behind Canada and overtaking Japan.

The new TPP deal would establish a trading group that goes from Chile to Japan and makes up around 40 percent of the entire world’s economic power. The Americans agreed to Japan’s request for duty-free shipment of autos to the North American region – even if a large part of the content doesn’t come from within the TPP. This triggered the Mexican issue – they want the agreement to come close to what the NAFTA has today: 62.5 percent of content needs to come from within the free-trade area to get the benefits.

Via Bloomberg