In recent weeks we saw Canada, Mexico and the United States present their respective positions and legal arguments, often in sharply worded exchanges, about how the Auto Core Parts rules of origin under the U.S.-Mexico-Canada Agreement (USMCA) should be interpreted. It is a high-stakes issue because assembly operations for vehicles and their “Core Parts” (engine, transmission, etc.) inevitably involve lengthy bills of materials with components from many countries, and what is being disputed is whether Core Parts once found to meet the USMCA requirements to be “originating” can then have their value counted as originating value (i.e., “rolled up”) in the calculation of the regional value content (RVC) of the vehicle as a whole.
One point all can likely agree on in these divisive times is that the Trump Administration’s international trade policy has been aggressive. Over the past four years, we have been clinging to our seats on the rollercoaster ride with some pretty challenging peaks and valleys:
- Section 301 tariffs on over $370 billion worth of imports from China, under which over $68 billion in total duties have been assessed;
- Replacement of NAFTA with the United States-Mexico-Canada Agreement (USMCA);
- Withdrawal from the Trans Pacific Partnership (TPP); and
- Imposition of Section 232 steel and aluminum tariffs, under which over $9 billion in total duties have been assessed.
On January 16, 2020, the United States Senate voted by an overwhelming majority to pass the implementing legislation for the United States-Mexico-Canada Trade Agreement (USMCA)…
Continue Reading Modernizing NAFTA: The United States-Mexico-Canada Trade Agreement