In view of the new treaty that is about to enter in to force, production standards were proposed for the automotive sector that benefit the three countries involved with material and labor from the aforementioned regions.
Said treaty establishes that the regional content value has a growth of 62.5 % for the production of vehicles. In addition, 40% must be manufactured in acountry that has a salary of at least 16 dollars an hour.
It must be verified that the material used for production has a higher content of steel and aluminum, in short, it is established that the vehicles built have 70% material from any of the three countries.
Other considerations to be taken into account for the TMEC treaty:
- Stronger provisions for record keeping are integrated.
- Material suppliers can be investigated to confirm the origin.
- Includes origin verification provisions that give authorities more capabilities.
- There are new certification provisions (for example, annual certificate issuance).
What is the downside to this treaty? Mexico must ensure that the material used for the production of automobiles originates from the country, so that production stays at home, without this representing an increase in vehicle costs, and that it does not affect operation and investment.
For more information write to infomexico@mesinc.net
