According to senior level officials in the Mexican auto industry, the 12-nation Pacific trading bloc seeking to close the deal on the Trans-Pacific Partnership (TPP) must now guarantee half of the content in locally produced vehicles must be regional.
The agreement on Mexico’s desire for the auto manufacturing industry was among the top motifs the negotiators failed to close the deal for the TPP at the end of last month. Mexican officials are now eager to see an agreement go through with their demands in the coming weeks, but the issue of automotive production remains a heated debate especially because of upcoming elections in Canada this year and in the United States in 2016. “A lower rule would allow more input from outside the region to be brought in, ” recently commented AMIA president Eduardo Solis. The leader of AMIA, the Mexican automakers association, believes vehicles, engines and transmissions must have “at least 50 percent” regional content sourced from within the trading bloc to ensure the main beneficiaries of the agreement would be the member nations.
Mexico is trying to lift the TPP auto rules closer to the standards imposed by the North American Free Trade Agreement, which has 62.5 percent of the net cost sourced from within the trading bloc. The negotiators on the TPP, which should encompass a vast region – from Japan to Chile – around 40 percent of the worldwide economies, didn’t manage to sign an agreement in July when they met on the Hawaiian island of Maui.