The new requirements of the Treaty of Mexico, United States, Canada (T-MEC), which require automakers, tractor-trailers and autopartists to increase domestic content, will result in the arrival of auto-parties to the North American region by Europe and Asia, and an increase in business proportionately in all three countries.
This was the main conclusion reached by the National Auto parts Industry (INA), voiced by its president, Oscar Albin, who referred to the entry into force of this new agreement, highlighting that the automotive industry, together with the agricultural sector, were the big winners of the now-defunct NAFTA, and now “we will continue to be in the T-MEC. I don’t see any problem, we have the conditions, because in the automotive industry it can’t change overnight.”
However, Albín recalled that the industry should take into account greater acquisitions of raw materials and Tier 2 companies in North America rather than Europe or Asia, without threatening its market presence.
For his part, Miguel Elizalde, president of the National Association of Producers of Buses, Trucks, and Tractors (ANPACT), recognized that “a lot of effort will be required to meet the Value of Labor Content, and steel and aluminum content. In addition, it puts the floor even to comply with uniform regulations in a homogeneous manner”.
Higher wages?
Another of the points that caused the greatest debate is that of the increase in wages in the automotive sector. As noted in the agreement, at least 40% of the parts of each vehicle exported by partner countries must be manufactured in plants where workers are paid $16 per hour, so that preferential treatment is not given and no tariffs are paid when exporting.
However, the INA has pointed out that in the event of the increase in salaries it will be a decision of each company, but does not mean an industry-wide pay increase in Mexico, recalling that, at present, the automotive sector is the best-paid in the country, in some cases $5 an hour, but does not compare to a salary of $16 per hour that is paid in the United States or Canada, over three times more.
