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ARTICLE · 24 JANUARY 2023

U.S. Loses CUSMA/USMCA Dispute On Automobile Origin Rules

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The "Canada-United States-Mexico Agreement" ("CUSMA") contains complex rules of origin that dictate how automotive goods qualify as "originating" and, therefore, benefit for preferential tariff treatment.

GlobalInternational Law
Peter Kirby
Peter Kirby
Steven Rosenhek
Steven Rosenhek
Daniella Murynka
Daniella Murynka
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The “Canada-United States-Mexico Agreement” (“CUSMA”) contains complex rules of origin that dictate how automotive goods qualify as “originating” and, therefore, benefit for preferential tariff treatment. To be eligible for such treatment, automotive goods must meet a prescribed “regional value content” (“RVC”), being the content of the goods originating in North America. CUSMA replaced the former NAFTA origin rules with significantly stricter rules requiring higher RVC in qualifying automobile parts and vehicles. The goal was to encourage North American manufacturing in the automobile sector. The CUSMA origin rules were hotly negotiated by the three governments and by North American vehicle producers who were directly affected — not just with respect to how much RVC was required, but also how RVC was calculated.

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