Yesterday the presidents of the United States and Mexico announced a preliminary agreement that in principle will be bilateral, this Agreement will replace NAFTA. The signing of this Agreement is expected by the end of November after a 90-day congressional review period.
As for Canada, there is the possibility of a bilateral Agreement with them and> the United States or the addition of this to the bilateral Agreement between Mexico and the United States.
Therefore, companies that import from Mexico must act now to assess the possible impact of these changes on their supply chains.
Among the agreements that were reached are:
- The regional content for the automotive industry will go from 62.5% to 75%
- Between 40 and 50% of the regional content parts must be made by workers earning at least $ 16 per hour.
- More stringent rules of origin, including industrial products such as chemicals, steel-intensive products, glass, and fiber optics.
- New procedures that simplify certification and verification of rules of origin and new cooperation and enforcement provisions to help prevent tax evasion.
- New provisions for transparency in import licensing and export licensing procedures.
- Prohibition of:
(a) requirements to use local distributors for import,
(b) restrictions on the importation of commercial goods containing cryptography, and
(c) restrictions on the importation of used goods for remanufactured products.
- Mexico will increase from $ 50 to $ 100 the value of shipments that can enter free of customs duties or taxes and with minimal formal entry procedures.
- New provisions covering trade in specific manufacturing sectors, including information and communication technologies, pharmaceuticals, medical devices, cosmetics, and chemicals
- Updated provisions to allow cross-border transfer of data.
- Updated provisions for the temporary duty-free admission of goods to cover shipping containers or other substantial supports used in the shipment of goods.
- Agreement to take measures to prohibit the importation of goods produced by forced labor, to address violence against workers exercising their labor rights, and to guarantee that migrant workers are protected by labor laws.