TOKYO (Reuters) – Japanese automaker Mazda Motor Corp (7261.T) welcomed on Tuesday a new trade deal between the United States, Mexico and Canada, and said it would work to meet new rules on components used in Mazda vehicles made in Mexico.
The logo of Mazda Motor Corp. is displayed at the company’s news conference venue in Tokyo, Japan May 11, 2018. REUTERS/Kim Kyung-Hoon
The United States and Canada reached an agreement on Sunday to update the trade pact, after Washington had forged a separate trade deal with Mexico in August.
“It’s a big step forward,” Mazda CEO Akira Marumoto told reporters at a briefing.
“We will work to satisfy the agreement’s requirements,” he said, referring to a stipulation included in the pact for the regional value content requirement for autos to eventually increase to 75 percent, from the current 62.5 percent.
Most of Japan’s major automakers operate plants in the United States, Canada and Mexico, while many also continue to export vehicles from Japan.
The United States is a key market for Mazda, one of Japan’s smaller automakers. It currently exports cars sold in the country from Japan or its plant in Mexico, although it has announced it will jointly build a plant with Toyota Motor Corp (7203.T) in Alabama, which will begin production by 2021.
The updated trade deal effectively maintains the auto industry’s current footprint in North America, and spares Canada and Mexico from the prospect of U.S. national security tariffs on their vehicles.
The United States and Japan last week agreed to begin fresh trade talks as U.S. President Donald Trump has said he wants to see more cars made in the United States, while Washington is also investigating the possibility of slapping 25 percent tariffs on auto imports on national security grounds.
Reporting by Naomi Tajitsu; Editing by Darren Schuettler and Muralikumar Anantharaman