Biden to face push back on EV rules at first Three Amigos summit in 5 years

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WASHINGTON, Nov 17 (Businesshala) – The leaders of the United States, Canada and Mexico will meet together for the first time in five years on Thursday to boost North American economic integration, but dispute over proposed EV tax credits and “Buy American” policies. are supported. May be dominated by President Joe Biden.

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Biden has revived the so-called Three Amigos summit to be held at the White House on Thursday afternoon for the first time since 2016. Former President Donald Trump left it in 2017. The bilateral meetings will take place on the first day.

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The three-way meeting is about advancing North American economic cooperation, but Canada and Mexico are both concerned about Biden’s ‘Buy American’ provisions and a proposed electric vehicle tax credit that would favor unionized, US-based manufacturers. .

The United States is the largest trading partner for both Mexico and Canada, and cars and trucks are the most traded manufactured goods among the three countries, said Colin Robertson, a former Canadian diplomat at Canada’s Global Affairs Institute think tank.

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“The North American automotive industry is deeply integrated and competing as one block in building a world-class e-vehicle and the battery industry makes good economic sense for all three countries,” said Robertson.

Canada and Mexico both want a level playing field as they compete to entice companies to set up plants for EV supply chains in their countries. And the United States is looking for alternative suppliers of critical minerals used in batteries to China, which Canada can provide.

The Social Spending and Climate Bill is being considered in Congress, which includes up to $12,500 in tax credits for US-made EVs, including a $4,500 credit for union-built vehicles. Bill is a key pillar of Biden’s domestic agenda.

Additional union tax credits for union-made vehicles face opposition from US Senator Joe Manchin, a Democrat from West Virginia. With an equally divided Senate, Munchkin has the power to block the motion.

Biden will visit General Motors Co.’s electric vehicle assembly plant in Detroit on Wednesday to show his support for the transition to electric car production.

In a comprehensive tripartite meeting, the White House has said it aims to create a “regional vision for migration”. Other topics include fighting COVID-19 and tackling climate change together.

However, there are likely to be bilateral meetings where more discussions are held.

In addition to the EV tax credit, Canadian Prime Minister Justin Trudeau is likely to bring in the Enbridge Inc. (ENB.TO) Line 5 pipeline, which the state of Michigan wants to close on environmental grounds.

For Mexican President Andres Manuel López Obrador, there could be a bi-lateral meeting where Biden presents a controversial plan to change the constitution to give priority to Mexico’s state-owned power company in the electricity market at the expense of private investment, especially in renewable energy.

López Obrador argues that the move is necessary because previous governments rigged the market in favor of private interests, but the law has drawn fire from the US government and business groups, who are concerned that it may violate Mexico’s obligations under the USMCA. may not conform.

Former US Energy Secretary Federico Pea told Businesshala he hopes Mexico will try to work out their differences lest it set a precedent that tarnishes its reputation.

“For Mexico to still be respected as a country for investment, it has to be very careful about radically changing contracts to the detriment of companies that have relied on the good faith of the previous administration’s negotiations.”

The leaders began holding the Three Amigos Summit in 2005 and met for most of the year until 2016.

Reporting by Steve Scherer in Ottawa, Dave Graham in Mexico City and Jarrett Renshaw in Washington, writing by Steve Scherer; Editing by Richard Pullin

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