Estimated Impact of the United States-Mexico-Canada Agreement (USMCA) on the US Automobile Sector



Office of the United States Trade Representative

The automotive rules of origin (ROO) in the North American Free Trade Agreement (NAFTA) are outdated, contain significant loopholes, and have encouraged the outsourcing of U.S. jobs. The new automotive ROO in the United States-Mexico-Canada Agreement (USMCA), by contrast, are designed to incentivize investment, production, and employment in the U.S. automotive sector (see Annex 1 for a Summary of Key USMCA Auto Rules of Origin Provisions).

Using information provided by automakers with assembly operations in North America, the Office of the United States Trade Representative (USTR) has made an initial assessment of the short term, quantitative impact of the USMCA’s new automotive ROO. In order to obtain the maximum transition time to comply with the USMCA’s rules, each North American vehicle producer must provide to USTR a credible compliance plan, outlining how the company will qualify its North American light vehicle fleet under the agreement’s rules over the transition period. Nearly every automaker in North America has voluntarily provided USTR with information that could be used to develop such a plan, on a business confidential basis.

ustr usmca report

[To read the full report, click here.]

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