The Office of the U.S. Trade Representative held a hearing Feb. 7 on the operation of the U.S.-Mexico-Canada Agreement with respect to automotive goods and is now accepting post-hearing briefs, supplementary materials, and statements no later than Feb. 28.
The USMCA includes new rules of origin to claim preferential treatment for automotive goods, including higher regional value content thresholds, mandatory requirements to produce core parts in the region, mandatory steel and aluminum purchasing requirements, and a labor value content requirement. The USMCA also allows vehicle producers to request an alternative staging regime for these requirements that would permit a longer period of transition to help ensure that future production is able to meet the new rules.
USTR is required to conduct a biennial review of the operation of the USMCA with respect to trade in automotive goods, including the implementation and enforcement of the USMCA auto rules of origin as well as whether the automotive provisions of the agreement are effective in light of technological and production advances. Details of USTR’s first report on these issues can be found here and the next report is due to the Senate Finance and House Ways and Means committees by July 1.
To help prepare this report USTR has sought input from producers of automotive goods, labor organizations, and other interested parties on the following issues.
- the overall operation of the USMCA with respect to automotive goods
- actions taken by automotive and parts producers to demonstrate compliance with the USMCA automotive rules of origin
- the use of alternative staging regimes by vehicle producers to meet those rules
- enforcement of those rules, including the alternative staging regimes and the automotive certification process for steel and aluminum content, LVC, and RVC
- whether the current rules are effective in light of new technology and changes in the content, production processes, and character of automotive goods
- whether the rules are effective in supporting the competitiveness of the North American automotive industry in light of global challenges such as excess capacity of electric vehicles
- the supply chain challenges identified in the 2022 report (e.g., semiconductor shortage, war in Ukraine) and the impact the USMCA had on overcoming those supply chain challenges
- the impact of the 2022 Inflation Reduction Act and similar legislation (e.g., the CHIPS and Science Act of 2022 and the Infrastructure Investment and Jobs Act) on the overall trade in automotive goods under the USMCA and those goods’ ability to meet the USMCA rules of origin
- specific issues faced by producers of heavy-duty trucks and other automotive goods not specifically addressed above
The International Trade Commission is conducting a separate investigation into the USMCA automotive rules of origin that will result in the second of five scheduled reports.
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