The upcoming review of the United States-Mexico-Canada Agreement (USMCA) is not expected to be a major renegotiation, but it could bring significant adjustments to one of the most sensitive chapters for industries located in Jalisco: the rules of origin.
Ernesto Sánchez Proal, president of the Guadalajara chapter of the American Chamber of Commerce (AMCHAM), told El Economista that the consensus among executives of large U.S. companies operating in the state is that the process will be a technical review of the agreement, albeit with a significant tightening of regional content requirements, particularly regarding inputs from Asia, and especially from China.
“It’s not yet known how this will turn out, but it’s very likely that this review will penalize the content of components originating from China more severely,” the AMCHAM president emphasized.
He explained that these conclusions stem from the meeting of the Council of Large American Companies of the AMCHAM Guadalajara, held in early December, in which the results of a visit by the chamber’s board of directors to Washington were analyzed.
During that trip, meetings were held with the Office of the United States Trade Representative (USTR), State Department officials, as well as members of Congress and senators involved in the bilateral trade agenda.
According to Sánchez Proal, the feedback received was positive and reflects high satisfaction on the part of the U.S. government with Mexico’s collaboration on trade issues and, particularly, on security matters. However, the message was clear regarding the United States’ intention to reduce its dependence on components manufactured outside the USMCA region.
The president of AMCHAM stated that, in addition, speculation has begun that the origin of capital could be incorporated as an additional criterion within the rules of origin, which would have direct implications for Jalisco as a destination for foreign investment.
“This isn’t a definitive statement, but it’s something that could happen in this review of the USMCA. That would have major implications because there are Asian-owned companies planning to operate here in the country, and even if they have inputs that comply with rules of origin, because their capital is from outside the region, they could also be penalized. This is speculation; it’s not conclusive yet, but there are signs of it,” the businessman pointed out.
Source: eleconomista
