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The new USMCA contract lasts up to seven years to adjust the contents of the car's truck parts. | AméricaEconomía

Mexico City, The Agreement between Mexico, the United States and Canada (T-MEC) will approve a seven-year period to adjust the rule on the origin of car parts used in the production of heavy trucks.

This is a longer period than a transition to a three-year rule of origin for passenger and truck vehicles.

For parts used in heavy trucks the origin rules will be divided into two categories. The first corresponds to the major automotive parts, with regional content values ​​(VCRs) of 70%, and the second includes complementary parts with a regional value of 60%.

Among the main auto parts are: motors, piston, engine parts, fuel pumps, fans, air pumps, air conditioners, drive shafts, gearboxes, steering wheels, chassis, body, locks, safety belts, brakes, differential control shafts, wheels, shock absorbers, radiators, dampers, exhaust pipes, clutches, airbags and seats.

In 2017, Mexico produced auto parts worth USD 92,000 million, while exports amounted to USD 73,500 million in the same segment, and imports reached USD 49,100 million.

By 2019, heavy truck manufacturers will have to buy steel and aluminum in the region to achieve 70% of North America's content and comply with the retroactive certification of car automotive rules as prescribed by new treatments.

Some of the complementary automotive parts include hydraulic hydraulic fluid pumps, electronic braking systems – including ABS and ESC systems, clutch and shaft clutches, lithium-ion batteries and ignition equipment.

Videorecorder is the percentage that shows how much goods are produced in the local producer region. The origin of the components or materials of the goods, the place of production of this and other factors, affects this percentage.

Generally, the origin rules relate to the criteria agreed in the Free Trade Agreement to define when profit is considered as a source (due to its regional content level) to enjoy tariffs.

The world's leading truck manufacturers manufacturing facility, workshop spare parts and maintenance workshops in Mexico include: Cummins, Daimler commercial vehicles, Detroit Diesel Allison from Mexico, Dina from Mexico, Freightliner Mexico, Foton Mexico, Isuzu from Mexico, Kenworth Mexicana, Mack Trucks Inc, Man Truck and Bus, Volkswagen Mexico, Scania de México and Volvo Mexico.

In the end, buses manufacturers have the longest manufacturing tradition in Mexico, with several manufacturing plants across the country.

The truck rule. From 2019, heavy truck manufacturers (among others, Daimler, Hino, Kenworth, Volvo, Man) will have to buy steel and aluminum in the region to achieve 70% of North American content and comply with the retroactive certification of automotive origin, as established by the Agreement between Mexico, the United States and Canada (T-MEC).

Miguel Elizalde, president of the National Association of Buses, Trucks and Trucks (ANPACT), said that Mexico, the US and Canada must retroactively enforce the regional value of steel and aluminum to begin buying the region's input.

Buying 70% of steel and aluminum that will make a heavy truck factory in three countries will come into force a year before the entry into force of the T-MEC, so the heavy industry and the Economy Secretariat should conclude the definition of the metal fractionation tariffs before signing .

In an interview, ANPACT leader explained that in the case of Mexico there are no major problems, because 98% of truck production is exported to North America, but the US must rebuild its purchases.

In the coming days, the Economy will define the tariff fractions of steel and aluminum (the only stock) that will be used by assembly companies, without the inclusion of auto parts, in order to comply with the rules of origin, as of 1 January 2019 – in the case of T-MEC entry into force 2020. "In two months, plants will have to buy steel and aluminum from the region because it is a retroactive year for the beginning of next year (with the Contract)."

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