Alternative Staging Regime For Passenger Vehicles And Light Trucks Under The USMCA

We know that, as the internal ratification procedures for the United States of America-Mexico-Canada Agreement ("USCMA") have concluded, the trade agreement will enter into force on July 1, 2020.

It is clear that the sector that underwent the greatest changes was the automotive sector, especially in relation with rules of origin.

Particularly regarding passenger vehicles and light trucks, significant changes were brought in order to consider such goods as originating:

• Higher percentages of regional value content.
• Particular requirements for essential parts 
• Requirements for regional steel and aluminum purchases
• Requirements regarding labor value content 

USMCA holds that for a period ending five years after the entry into force of the USMCA, this is July 1, 2025, the Parties shall provide that a passenger vehicle or light truck may be originating in accordance with an alternative staging regime to the standard three-year transitional period