Mexico would offset safeguard against US solar panels

Mexico would offset the extension of a safeguard on US imports of solar panels, a Mexican Senate commission said.

The Senate Special Commission for Monitoring the Implementation of the USMCA asked the Secretary of Economy, Tatiana Clouthier, to transmit this consideration to the US government.

Faced with the process carried out by the United States Trade Policy Staff Committee to analyze the extension of the 2018 safeguard against some photovoltaic cells, Mexico has shown that imports of Mexican origin of these products do not constitute damage to the US national industry and, on the contrary, Mexican exports have been severely affected by this measure, argues the Commission.

Therefore, he added, extending this safeguard measure without excluding Mexico would be inconsistent with the commitments acquired in the USMCA and would undermine regional efforts to integrate and strengthen supply chains.

Thus, Mexico could consider compensation in the event that the United States decides to maintain the safeguard that has affected «very significantly» Mexican exports of solar panels.

First of all, on June 18, 2021, Canada requested the United States to establish a panel under the Dispute Resolution Chapter of the USMCA to analyze the safeguard measures for solar panels adopted by the United States.

Solar panels

The panel request from Canada to the United States is given under Chapter 31 of the USMCA. It contemplates a State-State dispute settlement mechanism that the parties may invoke in relation to any dispute over the provisions of the Treaty.

The decisions of the Panel are binding. In the event that the Panel rules against you, the United States must eliminate the measures that are found to be in violation. Failure to do so could lead to Canada engaging in trade retaliation.

According to an analysis released by the Business Coordinating Council (CCE), one of Canada’s main arguments for the panel’s request is that Canada has not had a substantial share in the supply of photovoltaic cells in the US market, therefore , The United States should have excluded it from the measure.

The measure challenged by Canada refers to the adoption of a global safeguard that has also affected the importation of the Mexican product into the United States market.

On the contrary, the situation in Mexico is different: in 2018 (the year the measure was adopted), Mexico ranked fourth in the supply chain, with a participation of 8%, so the American Union can include it in the application of the safeguard measure.