Federal Register Notice: 4/21/2020
From the Office of the United States Trade Representative Regarding: Request for Petitions
Procedures for the Submission of Petitions by North American Producers of Passenger Vehicles or Light Trucks to Use the Alternative Staging Regime for the USMCA Rules of Origin for Automotive Goods
For a limited period, a North American producer of passenger vehicles and light trucks (vehicle producer) may request an alternative to the standard staging regime for the rules of origin for automotive goods under the United States-Mexico-Canada Agreement (USMCA or the Agreement) using the procedures and guidance for submitting petitions in this notice.
To be assured of consideration, a vehicle producer must submit a petition with a draft alternative staging plan no later than July 1, 2020. A vehicle producer must submit a petition with its final alternative staging plan no later than August 31, 2020.
If their new staging plan is approved, USTR would allow companies a five year period to transition to the USMCA regional content rules, rather than three years under the standard regime. Companies will have to provide detailed information about their production and how every model will be able to meet the stricter standards, even if it takes longer than the five year transition period of the alternate regime. If the plan is approved, during the five year transition, companies can avoid the 2.5% duty that must be paid for many non-complying vehicles under the current NAFTA regime. Companies will need to identify North American investments, sourcing and other details that will allow their vehicles to meet the standard rules, after the transition period.
The USMCA includes new rules of origin to claim preferential treatment for automotive goods, including higher Regional Value Content (RVC) thresholds, mandatory requirements to produce core parts in the region, mandatory steel and aluminum purchasing requirements, and a Labor Value Content (LVC) requirement. The Agreement allows vehicle producers to request an alternative staging regime for these requirements that would permit a longer period of transition to help ensure that future production is able to meet the new rules
To qualify for an alternative staging regime, a vehicle producer must submit a petition with the information described in Section III, of the notice including a detailed and credible plan if the quantity of vehicles for which the producer requests an alternative staging regime exceeds a ten percent threshold. (You must submit specific information) A plan could include commitments to make additional investments in the United States and North America, or additional purchases of U.S. and North American parts.
You can find more information on the criteria for acceptance of a plan this Federal Register Notice. Due to the integrated nature of the North American auto industry and market, USTR will coordinate with the governments of Canada and Mexico throughout the alternative staging process.
More from the Federal Register: https://www.federalregister.gov/documents/2020/04/21/2020-08405/procedures-for-the-submission-of-petitions-by-north-american-producers-of-passenger-vehicles-or
If you feel that you may need some assistance with your petition, feel free to contact:
Adrienne Braumiller, [email protected]
Contributing Advisors
