The USMCA Rules of Origin: Changes Affecting Auto Manufacturers and Auto Parts Makers

Oct 10 16:10 2018 Print This Article

Late in the evening on September 30, 2018, the United States, Canada and Mexico announced the conclusion of negotiations of the United States – Mexico – Canada Agreement (”USMCA”) (also known as NAFTA 2.0). While the text of USMCA remains to be finalized, formally signed and ratified by each of the three countries, a preliminary text of the new requirements has been published on the USTR website. LexSage has published an USMCA Resource Guide with USMCA Chapters, NAFTA Chapters and TPP (not CPTPP) Chapters and comparison tables.

Now is the time for auto manufacturers and auto parts makers to strategize how their organizations can optimize their position within a newly framed North American auto industry.

Canadian auto manufacturers will now need to ensure that the parts that they purchase meet new and complex requirements set out in the USMCA.  If they do not, their vehicles may not qualify as “originating”.  Vehicles produced that are not “originating”, will not enjoy duty free treatment under the USMCA when they are exported to one of USMCA countries (i.e, Canada, U.S., Mexico).

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Canada-US Blog

This blog is about Canada-United States cross border legal issues. Some of the authors are practicing lawyers and some are law students. This is a forum for discussion that presents an opportunity for law students to contribute and become known to potential employers in this dynamic area of the law.

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