USMCA

Date: March 16, 2020

MEMA Staff Contacts:

Ann WilsonLeigh Merino and Bill Frymoyer

Status:

Implementing the new trade agreement requires legislative and regulatory actions. Here is the status of the three countries:

UNITED STATES:  On December 19, 2019, the U.S. House of Representatives voted on the USMCA implementing bill (H.R. 5430) 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). On January 29, 2020, President Trump signed it into law as Public Law No: 116-113.

CANADA:  Both chambers of the Canadian Parliament voted on March 13, 2020 to adopt the agreement; it will be officially ratified once the Canadian Governor-General has approved it.

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

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 rules of origin (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).

What Suppliers Need to Know:

MEMA’s one-pager on its advocacy efforts for USMCA “by the numbers” (view here)

The most significant changes under the USMCA were related to the automotive specific 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.

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.

USMCA-Resources:

Executive Office of the President of the United States –

  • Executive Order 13907; Establishment of the Interagency Environment Committee for Monitoring and Enforcement Under Section 811 of the USMCA Implementation Act
  • Executive Order 13908; Establishment of the Interagency Committee on Trade in Automotive Goods Under Section 202A of the USMCA Implementation Act

Office of The U.S. Trade Representative –

U.S. Congress –

U.S. International Trade Commission

Printer-friendly version