MEXICO CITY -- Mexico has sought arbitration from an expert panel to resolve differences with the U.S. over the interpretation of rules of origin in the automotive industry, Mexico's economy ministry said on Thursday.
"Mexico believes a panel decision will give certainty to the auto industry, benefiting competition in the region," the ministry said in a statement, adding it filed the request for the arbitration on Thursday after previously raising concerns with the U.S.
Mexico filed the arbitration request on Thursday after previously raising concerns with the U.S., and a decision should be reached by the panel this year, it added.
The members of the panel, which Reuters had previously reported Mexico would call for, are still to be determined.
Mexico expects the panel to clear up disagreements with the U.S. over how to apply automotive sector content requirements under the United States-Mexico-Canada Agreement, which underpins trade in North America.
The panel dispute puts the spotlight back on where autos are built in the region, a question that lay at the heart of former U.S. President Donald Trump's drive to replace the North American Free Trade Agreement with what became USMCA.
Adam Hodge, a spokesman for the U.S. Trade Representative, said the office was "reviewing Mexico’s request to establish a panel and remain confident that the U.S. interpretation of the automotive rules of origin is consistent with the USMCA."
Mexico favors a more flexible interpretation of the auto industry regulations than the U.S., which sought an overhaul of NAFTA in order to protect U.S. manufacturing jobs.
U.S. trade unions argue that jobs have migrated to lower-cost Mexican plants since NAFTA first took effect in 1994.
