Canada will likely be an third occasion in discussions between the U.S. and Mexico over guidelines governing vehicles traded in North America, avoiding direct confrontation with the Biden administration forward of elections subsequent month whereas nonetheless exhibiting concern concerning the U.S. place.

Mexico final week requested formal consultations with the U.S. to settle a disagreement over the way to measure regional content material for vehicles to commerce duty-free. The U.S. insists on a stricter technique than Mexico and Canada imagine they agreed to for counting the origin of sure core components together with engines, transmissions and steering programs within the total calculation, folks aware of the matter mentioned final month.

The U.S. place on the foundations within the commerce deal generally known as the U.S.-Mexico-Canada Settlement may push automakers to desert the area as a consequence of cumbersome and expensive content material necessities, Luz Maria de la Mora, Mexico’s undersecretary of economic system for overseas commerce, mentioned in an interview this week.

“We all know how vital the auto trade is to Canada’s employees and the Canadian economic system,” Michel Cimpaye, a spokesperson for the federal government’s world affairs division, mentioned in an emailed response to questions Friday. “Canada has suggested the U.S. and Mexico that it intends to affix the consultations as a 3rd occasion. We proceed to work with the trade on these and different vital points.”

Bloomberg reported final month that Mexico, Canada and automakers had been all aligned towards the Biden administration on the foundations.
 

Canada’s transfer “will and needs to be interpreted” as taking Mexico’s aspect, mentioned Flavio Volpe, president of Canada’s Automotive Components Producers’ Affiliation. “Canada understands that the continental automotive sector’s world competitiveness is in danger if the U.S. place carries, they usually’re very smart so as to add their weight to this motion,” he mentioned.

That is the primary time that the Canadian authorities has publicly commented on the disagreement, with the nation within the midst of an election marketing campaign. Prime Minister Justin Trudeau’s administration formally entered caretaker mode this month after he referred to as a snap election for Sept. 20.

The Trudeau administration’s determination on the way to take part within the automotive disagreement can be indicative of his broader strategy to Canada’s relationship with the U.S., the nation’s most vital ally. Trudeau and his authorities choose a cautious strategy to disputes with the U.S. in an effort to keep up good relations with Canada’s southern neighbor and reduce any harm to the nation’s economic system.

Regardless of total smoother relations with President Joe Biden’s administration than underneath President Donald Trump, Trudeau has complained to his American counterpart about U.S. cancellation of a allow for a big pipeline challenge, in addition to a strengthening of the “Purchase America” procurement coverage.