Mexico says USMCA-compliant exports would be exempt from US forced-labor tariffs

MEXICO CITY, June 3 (Reuters) - Mexico said on Wednesday that goods complying with the rules of origin under the United States-Mexico-Canada Agreement (USMCA) would be exempt from a proposed 10% U.S. tariff tied to an investigation into forced labor enforcement.

The Mexican Economy Ministry said the clarification came after consultations held with the Office of the U.S. Trade Representative (USTR). It added that roughly 85% of Mexico's exports to the United States qualify under USMCA rules of origin

and therefore would not be subject to the proposed measure.

• The USTR has proposed a 10% tariff on imports from Mexico and around a dozen other economies, including Canada, the European Union, Argentina and Britain, as part of an investigation alleging that 60 countries failed to effectively prevent imports of goods made with forced labor in third countries.

• Another 45 economies would face additional duties of 12.5%.

• Mexico said the proposal would also not affect goods already covered by Section 232 orders, including autos, steel and aluminum.

• The ministry added that the proposed tariffs would not take effect immediately and instead would be subject to a 45-day consultation process.

• During that period, Mexico will hold formal talks with the USTR, including a round led on the Mexican side by Economy Minister Marcelo Ebrard, to present information on the country's actions and commitments to combat forced labor.

• Discussions over remaining roughly 15% of its exports that do not meet USMCA origin rules would continue over the coming weeks, the ministry said, and it expressed confidence that the proposed tariff treatment would be modified as a result of the bilateral talks.

• The ministry added that, according to the U.S. government, the Section 301 investigation is part of a broader strategy to replace tariffs previously imposed under other authorities, including measures struck down by the U.S. Supreme Court and tariffs due to expire on July 24.

(Reporting by Aida Pelaez-Fernandez, Raul Cortes and Kylie Madry; Editing by Paul Simao)