A biennial report from the Office of the U.S. Trade Representative concludes that in the four years since its entry into force the U.S.-Mexico-Canada Agreement “has had significantly positive economic impact on the U.S. and North American auto industry, benefitting producers, suppliers, and workers.” The industry “has largely rebounded from the critical input shortages and supply chain challenges” of the past few years, the report states, and “vehicle and parts producers continue to make significant investments in North American sourcing and production.”
At the same time, the North American auto sector is facing several hurdles in implementing the USMCA’s provisions. Particular challenging have been the USMCA’s rules of origin for claiming preferential treatment for automotive goods, which include 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. According to the report, supply chain vulnerabilities and global market distortions have made it difficult for automakers to adjust to the full scope of the ROOs.
For even more USMCA resources, including training, click here.
