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Trade

'No special treatment' for China's CPTPP bid: Mexican trade official

Undersecretary de la Mora says Beijing's application will face necessary screening

Mining equipment at the Cananea copper mine in Mexico. Copper is high on the list of Mexican exports to China.   © Reuters

MEXICO CITY -- Members of the CPTPP trade pact will not bend the rules to admit China, a senior Mexican trade official told Nikkei, putting a less-positive spin on Beijing's application than a reported comment by Mexico's foreign secretary.

"We want to make sure that we maintain the standard, or that we improve the standard, but we'll have no exceptions, no carve-outs, no transitions, no special treatments," said Luz Maria de la Mora, undersecretary for foreign trade, in an interview Monday.

Mexican Foreign Secretary Marcelo Ebrard had told Chinese Foreign Minister Wang Yi in October that Mexico "welcomes" China to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, according to China's foreign ministry.

But de la Mora said that "the CPTPP negotiations and implementation are [the] responsibility of the ministry of economy." She works in that ministry, formally the Secretariat of Economy.

"No decision has been made at all," de la Mora said, after noting that Mexico will review the Chinese application via a process entailing "a lot of work, a lot of attention, a lot of analysis."

China applied to join the CPTPP in September. All parties to the trade agreement must agree to allow a new member in.

Another complicating factor is that the United States-Mexico-Canada Agreement, which went into force in 2020, requires a member to inform the others if it intends to initiate talks toward a free trade agreement with a nonmarket economy.

"There needs to be a decision that we would go ahead with that, and we're not there yet," de la Mora said of the notification. "We're very far ... from getting there."

The U.S. accounts for 80% or so of Mexico's goods exports. Asked whether Washington could block the Chinese bid to join the CPTPP, de la Mora stood by the bloc's independence.

"I think that the decision that we take, it will be by the 11 CPTPP members," she said.

De la Mora also discussed the tax credit that U.S. President Joe Biden's administration seeks to grant to electric vehicles made in unionized American assembly plants as part of the Build Back Better spending bill. She said the credit goes against the USMCA and called for amending the legislation.

With the opposition posed by Sen. Joe Manchin and other influential members of Biden's Democratic Party, there is a reasonable chance that the EV tax credit will be revised in the end.

Luz Maria de la Mora, undersecretary for foreign trade in Mexico's economy ministry, 

If it does pass as is, "Mexico will make use of all of its available resources, legal resources, to defend our interests, and to make sure that what we have negotiated, signed and implemented with the U.S. and Canada under USMCA is respected as it should be," de la Mora said.

The U.S. has been at odds with Mexico and Canada over what qualifies for tariff-free trade. Washington's strict interpretation would impose tariffs on a wide range of imported automobiles. Mexico and Canada argue for allowing more vehicles to be imported with no tariffs.

A panel may be convened in the interest of resolving the issue, de la Mora said.

"And we hope that probably by the end of the year, we'll have a definition of what are the next steps regarding this case," she said.

The European Union and the U.S. have discussed whether to impose carbon border adjustments, which would in effect translate to tariffs on goods from countries with lax measures against climate change. De la Mora looks to ensure that the adjustments do not amount to an additional tariff barrier for Mexican exports.

"What we are trying to make sure is that we are kept abreast about what they're doing, and also to make sure that any border measures are consistent with our obligations with USMCA, that they're nondiscriminatory, and that they do not distort or deviate trade," she said.

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