Background on Key Figures and Relevance
The Mexican automotive industry, represented by the Association of Mexican Automotive Industry (AMIA), including Industria Nacional de Autopartes (INA), ANPACT, and AMDA, is preparing for a complex review of the United States-Mexico-Canada Agreement (T-MEC). The industry is concerned about the potential tightening of the “rules of origin” for light vehicles, which could limit the use of Chinese components.
Rogelio Garza, president of AMIA, highlighted the anticipated challenges in the T-MEC review process. He emphasized that the focus would likely be on revising and potentially strengthening the rules of origin, as well as examining the growing Asian influence in automotive components.
Industry’s Position and Requests
Garza urged Mexico’s Secretary of Economy, Marcelo Ebrard, to ensure that the T-MEC review starts from a foundation of free trade. He stressed the importance of avoiding barriers like tariffs on the automotive industry, as these measures could weaken the North American region.
During a panel discussion on T-MEC review and its implications, the industry called for a trilateral dialogue involving public-private partnerships and coordination among Mexico, the United States, and Canada. They aim to approach the review as a regional effort.
Potential Impact on Mexican Auto Parts Industry
Francisco González, president of INA, warned that if the Mexican auto parts industry ceases operations in the United States, the U.S. could lose $3.2 billion due to decreased demand for intermediate goods.
The industry plans to actively participate in the U.S. public consultation process and prepare for potential changes by increasing domestic supply chains.
Preparing for Potential Changes
Industry leaders, including Rogelio Arzate from ANPACT, acknowledged the uncertainty surrounding a possible 25% tariff imposed by the U.S. government. They are preparing for these changes, focusing on enhancing local supplier capacity for heavy vehicles and maintaining foreign direct investment attraction.
The industry aims to strengthen local providers, especially small and medium enterprises (SMEs), by collaborating with the Secretary of Economy and international organizations like the International Finance Corporation (IFC) under the World Bank. This partnership aims to promote quality, innovation, and certifications.
Key Priorities for the Industry
González outlined three primary areas of focus: talent, competitiveness, and regulatory certainty. He emphasized that without clear regulations and policies, investments could stall, making the collaboration between Mexico, the U.S., and Canada crucial for navigating the T-MEC review.
Key Questions and Answers
- What is the T-MEC review about? The review focuses on potentially tightening the rules of origin for light vehicles and examining the growing influence of Asian components in the automotive industry.
- What is the Mexican automotive industry’s stance on tariffs? The industry, represented by AMIA and its member organizations, urges against imposing tariffs on the automotive sector to avoid weakening the North American region.
- What are the potential consequences if Mexican auto parts operations cease in the U.S.? The industry could lose $3.2 billion due to decreased demand for intermediate goods in the U.S.
- How is the industry preparing for potential changes in the T-MEC? The industry plans to actively participate in public consultations, increase domestic supply chains, and collaborate with international organizations to strengthen local providers.
- What are the key priorities for the Mexican automotive industry? The industry focuses on talent development, competitiveness, and regulatory certainty to ensure a robust and resilient sector.
