The United States International Trade Commission has launched a formal review of the automotive rules of origin under the United States Mexico Canada Agreement, a move that could have significant implications for car manufacturers, suppliers and consumers across North America. The investigation will examine how the current rules are affecting production, investment, jobs and competitiveness within the region’s auto industry.
Rules of origin determine how much of a vehicle must be produced within the United States, Mexico and Canada in order to qualify for duty free trade benefits under the agreement. Under USMCA, at least 75 percent of a vehicle’s value must originate in North America. In addition, a substantial portion of the vehicle’s content must be manufactured by workers earning higher wages in the United States or Canada. These requirements are stricter than those under the previous NAFTA framework and were designed to encourage more regional production and better paying jobs.
The new review by the commission will assess whether these rules are achieving their intended goals. Officials are expected to analyze data related to manufacturing output, supply chain adjustments, employment trends and pricing impacts. The study will also consider how evolving technologies such as electric vehicles and advanced battery production are influencing compliance with the current standards.
Automakers operating in North America have had to reorganize supply chains to meet the higher content thresholds. Some companies have increased sourcing from within the region, while others have faced higher production costs. Industry leaders argue that regulatory clarity and stability are essential as the sector transitions toward electrification and more complex manufacturing systems.
The findings of the commission could play an important role in the broader review process built into the trade agreement. USMCA includes a scheduled joint review mechanism that allows the three member countries to evaluate the agreement’s performance and decide on its continuation. Any recommendations emerging from the commission’s report may shape future negotiations between Washington, Ottawa and Mexico City.
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