La Jornada – SE is extending 12 car manufacturers’ time to comply with new T-MEC rules

Mexico City. The Ministry of Economy (SE) He reported so Agreed The Orders from 12 companies in the automotive sector For adoption a Transitional Alternative System (RTA) that will allow a Period of transition Long For Implementation of The New rules of origin for automotive goods, K The highest value for regional contentRequirements Basic auto partsAnd the Purchases of steel and aluminum, as long Work content value Which founds Treaty between Mexico, the United States, and Canada (T-MEC).

The companies that will benefit from this extension are:

Tesla, inc.

Volkswagen de México, SA de CV

Volvo Car USA

FCA México, SA de CV

Hyundai Motor America

Mazda Motor de México, S. de RL de CV

Toyota Motor de México, S. de RL de CV

Kia Motors Mexico

Kia Motors Manufacturing Georgia, Inc.

Nissan Mexicana, SA de CV

Ford Motor Company SA de CV

Aguascalientes Industrial Cooperation Factory, SAPI de CV

T-MEC allows manufacturers of certain cars to order an Alternative Transmission System (RTA). On April 30, 2020, “the agreement under which the Ministry of Economy informs the producers of passenger cars or light trucks in North America of the procedures for filing applications in the Official Journal of the Union for the use of an alternative transitional system in accordance with the Appendix 4-b to Chapter 4 of the Agreement between the United States of Mexico And the USA and Canada.

This system would bring significant savings to vehicle manufacturers, “Producers may require preferential treatment of tariffs, and compliance with more flexible rules of origin for a longer period of time than they would have to comply without the alternative relocation regime,” the agency published in the Official Gazette of the Federation (DOF) on 30 April 2020.

The Alternative Transmission Scheme will be in effect for five years after T-MEC comes into effect, unless the vehicle manufacturer requests a longer period and is accepted by the Ministry of Economy.

Currently, T-MEC confirms that it will provide free trade cars that comply with certain rules of origin.

For example, the regional value of the content (VCR) should range from 62.5 to 75 percent in the three-year period from the entry into force of the T-MEC.

In terms of labor value content (LCV), it has been ensured that 40 percent of the vehicle’s value must be produced using wages of at least $ 16 an hour.

Additionally, as of July 1, 2020, 70 percent of steel and aluminum must come from the North American region.