USMCA

Date: January 17, 2020

Status:

On May 30, 2019, the Trump Administration sent a Draft Statement of Administrative Action to the Congress, which is required as part of the Trade Promotion Authority process. This precipitated several months of negotiation between the Congress and Administration on some refinements of the USMCA.

On December 10, 2019, the Congress and the Administration reached a deal to increase enforcement, enhance labor and environmental rules and facilitate access to medicines. These were quickly accepted by Canada and Mexico as amendments to the USMCA.  

On December 19, 2019, the U.S. House of Representatives voted on the USMCA implementing bill (H.R. 5430). The measure passed 385-41 (view roll call vote here).

On January 16, 2020, the U.S. Senate passed the bill 89-10 (view the roll call vote here).

The Canadian Parliament is expected to vote on USMCA legislation right after the U.S. Senate does.        

The Mexican Congress passed its USMCA legislation on June 20, 2019. On December 12, 2019, it quickly adopted the amendments to the USMCA.

What Suppliers Need to Know:

The most significant changes under the USMCA were related to the automotive specific rules of origin (ROO) that overhauled the regional value content (RVC) requirements, created a matrix of parts categories, vehicle applications, and increased the RVC values. The new ROO also includes two new compliance requirements for vehicle producers – steel and aluminum requirements and labor value content requirement – both of which have implications for vehicle suppliers.

MEMA has created a slide deck that summarizes the USMCA Rules of Origin (view excerpt of timeline below). If you are a member of one or more of MEMA’s divisions (OESA, AASA, HDMA or MERA) and would like a copy of that reference material, please email your request to Leigh Merino, MEMA vice president of regulatory affairs.

Next Steps:

The next phase will be developing the uniform regulations, which is where the three parties can address compliance issues with the new, complex automotive ROO. The uniform regulations govern the interpretation and application of the ROO.

Under the USMCA Implementing Bill, the uniform regulations implementing the automotive ROO must be issued on or before the date on which the USMCA goes into effect (i.e. enters into force).

Background and History:

In August 2017, the United States began negotiations with Canada and Mexico to update and replace the current North American Free Trade Agreement (NAFTA). The parties conducted several negotiating rounds that culminated in a draft agreement just over a year later in October 2018. On November 30, 2018, the final text of the United States-Mexico-Canada Agreement (USMCA) was signed by President Donald Trump, President Enrique Peña Nieto and Prime Minister Justin Trudeau.

Throughout 2019, MEMA worked closely with the Office of the U.S. Trade Representative to better understand the rules of origin and the impact on vehicle suppliers and to establish common areas of understanding and positions on implementation.

MEMA Staff Contacts:

Ann Wilson, Leigh Merino and Bill Frymoyer

USMCA-Resources:

Office of The U.S. Trade Representative –

U.S. Congress –

U.S. International Trade Commission

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