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Biden meets Lopez Obrador and Trudeau at Mexico summit: Live updates


credit…Luis Antonio Rojas for The New York Times

The trade agreement that has more closely linked the economies of Canada, the United States and Mexico will face a significant test this week as a panel of experts is expected to rule that the United States has violated the agreement’s rules related to car manufacturing .

The pending resolution on one of several prominent North American trade disputes comes as the leaders of the three countries gather in Mexico City for a high-level meeting. President Biden, Mexican President Andrés Manuel López Obrador and Canadian Prime Minister Justin Trudeau reaffirmed their commitment to deepening trade between their economies and meeting the terms of the United States-Mexico-Canada Agreement, which entered into force in July 2020 .

But all three countries have been criticized by their trading partners for violating various aspects of the pact, which revises and updates the older North American Free Trade Agreement, or Nafta. The United States and Canada continue to clash over Canada’s dairy management system, while Mexico has come under fire for its energy policy and plans to ban imports of genetically modified corn that would hurt American producers.

This week, a panel of experts created by the trade deal to settle disputes is expected to rule against the United States on a complaint over how American officials are interpreting auto-making rules, according to people familiar with the ruling.

The dispute centers on differing requirements for the percentage of car components that must be manufactured in North America to qualify for zero tariffs under the trade deal. Canada and Mexico have challenged the way the United States makes its calculations, saying its measure of “North American content” is stricter than the rules require.

It remains to be seen how the US will react. Trade officials in December sharply criticized two World Trade Organization decisions against the United States to handle separate trade disputes.

People familiar with the discussions said U.S. officials were unlikely to publicly reject the decision, as they did for the World Trade Organization. But there is a question of how actively the United States will seek to comply with a decision.

In a Jan. 8 letter, business groups from the United States, Canada and Mexico urged governments to work towards speedy resolution of disputes on energy, car manufacturing and dairy products and to commit to full compliance with the terms of the trade agreement.

From the US-Mexico-Canada Agreement entered into force, there has been a sharp jump in the number of formal trade disputes that countries have brought against each other. According to Brookings Institution tracking, the countries have launched 17 trade disputes against each other since 2021 alone, covering issues ranging from Mexican labor violations to the US-Canada timber dispute.

But Eric Farnsworth, vice president of the Council of the Americas and the American Society, a Washington think tank, said that’s partly because the US-Mexico-Canada Agreement covers even more industries and issues than its predecessor, Nafta, including topics such as digital trade and the ability of auto workers in Mexico to form independent unions.

Officials say the trade deal provides a way to separate those disputes and prevent them from poisoning the broader relationship.

“Too many jobs depend on these agreements to allow these disputes to get out of hand,” said Louise Blais, a former Canadian diplomat who is now a senior adviser to The Pendleton Group.


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