The automotive industry will have a longer period to comply with the rules of origin of the Treaty between Mexico, the United States and Canada (T-MEC).

«We are working on the design of the alternative transition regimes (RAT) that will allow car manufacturers to access longer terms to comply with the new origin regime,» said Luz María de la Mora, undersecretary of Foreign Trade of the Ministry of Economy.

In the production of cars, the T-MEC increases the Regional Content Value (VCR) from 62.5% to 75%, with a new methodology. It also establishes a Labor Content Value (VCL) of 40%. That is, 40% of the value of the vehicle must be produced using wages, at least US $ 16 per hour.

Several automotive companies and organizations asked to postpone the entry into force of the T-MEC, scheduled for July 1.

«We are in the midst of a global pandemic that is significantly altering our supply chains, and the industry is using all available resources to manage production through this crisis for our employees and for the United States economy as a whole,» the American Automotive Policy Council, the American International Automobile Dealers Association, Here for America, the National Automobile Dealers Association and the Motor & Equipment Manufacturers Association said in mid-March.

Rules of origin and industry

With these RATs, interested companies can access longer periods to comply with the new regional content values.

For the application of rules of origin, the T-MEC foresees the development of uniform regulations (UK). These RUs serve the exporter because it gives them certainty about how to comply with them.

The RUs will provide details and offer methodologies necessary to implement each of the requirements of the new rules of origin, including various formulas and examples.