MEXICO CITY, Oct. 16 (Xinhua) -- Investment in Mexico's auto industry will keep flowing in spite of stricter requirements outlined in the new free trade agreement for North America, said the president of the Mexican Automotive Industry Association (AMIA) Tuesday.
The new regional content rule specified in the United States-Mexico-Canada Agreement (USMCA) is a new goal and also a new challenge for companies, Eduardo Solis said.
"I don't foresee a drop in investments," Solis said. "Companies will surely have to make an effort in order to meet the rule-of-origin requirements which are not only complex but also stricter."
The new agreement, a modernization of the North American Free Trade Agreement (NAFTA), increased the regional content requirement for light vehicles from 62.5 to 75 percent, as a means to guarantee free trade among the three countries.
In addition, the agreement, which was reached on Sept. 30, also established that 40 percent of motor vehicles should be manufactured in areas where the minimum wage for workers is 16 U.S. dollars per hour.
The new requirements, Solis said, "clearly" seek greater integration of the industry in North America, which also means greater investments.
On Monday, Canada's international bank Scotiabank said the new regulation could lead to exit of factories from the United States.
Mexico is the seventh largest producer of lightweight vehicles in the world, with a record manufacturing of about 3.8 million vehicles in 2017.
Mexico, the second largest economy in Latin America behind Brazil, is home to manufacturing factories for Ford, General Motors and Toyota, among others.
