Beginning in August 2017, the administration engaged in intense negotiations with Canada and Mexico. Just over a year later, the parties concluded negotiations and signed a new pact called the U.S.-Mexico-Canada Agreement (USMCA), which, if ratified, would replace the current NAFTA. The Office of the U.S. Trade Representative will draft and present implementing legislation to the U.S. Congress. From there, the agreement will be vetted through the legislative process and, eventually, the Congress will take a vote whether to ratify the agreement. Canada and Mexico will also undergo their respective ratification processes with their governments.
The most significant changes under the USMCA were related to the automotive rules of origin (ROO) overhauling regional value content (RVC) requirements – creating a complex matrix of categories, vehicle applications, and RVC values. The new ROO also add two new compliance requirements for vehicle manufacturers related to steel and aluminum content and labor value content – both of which have market implications for suppliers.
MEMA Statement on United States-Mexico-Canada Agreement (USMCA)
MEMA supports and urges the U.S. Congress to pass the United States-Mexico-Canada Agreement (USMCA) without delay. The USMCA will provide economic certainty and opportunity for manufacturing growth in the United States and throughout the region. This economic certainty is essential for U.S. suppliers to advance the safety and fuel efficiency technologies required to be competitive in the global mobility marketplace.
As the U.S. Congress moves forward with the passage of the USMCA, MEMA will continue working with the Trump Administration to resolve U.S. tariffs on steel and aluminum imports from Canada and Mexico and to clarify the implementation rules governing the agreement. MEMA strongly supports passage of the USMCA as it will serve as a catalyst for further manufacturing and job growth in the United States.
May 30, 2019 - Trump Administration sent a Statement of Administrative Action to the Hill, starting a 30 day clock. At the end of 30 days, the administration can send up a draft USMCA implementing bill.
June 19, 2019 - Mexican Senate approves legislation ratifying USMCA in a special session.