By Kylie Madry
MEXICO CITY, Nov 11 (Reuters) – Mexico is working to block steel from China and other countries from being rerouted through Mexico into the US under North America’s trade pact, a Mexican official said on Wednesday, as Mexico presses Washington for relief from steel, aluminum and auto tariffs.
Luis Rosendo Gutierrez, Mexico’s deputy economy minister for foreign trade, told journalists the government had tightened traceability measures and was guaranteeing that products were not reaching the United States by exploiting Mexico’s trade preferences.
Steel has become a politically sensitive issue for US-Mexico trade, with Washington determined to block Chinese goods and inputs from entering the US market through third countries.
“We want to guarantee – and we are guaranteeing – that there is no triangulation of steel or other products that reach the United States taking advantage of our trade agreement,” Gutierrez said.
Gutierrez said Mexico had removed around 1,100 steel mills from its approved registry, many in Asia, after finding they did not actually exist. The move helped cut steel imports from Vietnam by 80% in the past several months.
He added that Mexico had reduced steel and aluminum imports from third countries including China, South Korea and India by about 30%, equivalent to some 13 billion pesos ($698.54 million) in imports.
Mexico’s priority, Gutierrez said, is to reduce the impact of US Section 232 tariffs on autos, steel and aluminum rather than focus on a broader review of the US-Mexico-Canada trade pact.
About 80% of Mexican exports to the United States already enter tariff-free, he added.
Gutierrez said US officials have welcomed proposals from Economy Minister Marcelo Ebrard, and that Mexico hoped for positive news in the coming weeks before year-end.
Analysts argue that Mexico is not a hub for steel “transshipment,” in which goods are routed through another country before reaching their final destination, typically to avoid tariffs.
Still, a report last month by Washington-based think tank the Center for Strategic and International Studies said certain goods may undergo significant processing in Mexico before being exported to the US, rather than simply passing through the country.
($1 = 18.6103 Mexican pesos)
(Reporting by Kylie Madry; Editing by Iñigo Alexander and Alistair Bell)
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