The U.S. International Trade Commission (USITC) today released its first report on the economic impact on the United States of the United States-Mexico-Canada Agreement (USMCA) automotive rules of origin (ROOs), their operation and effects on the U.S. economy and U.S. competitiveness, and whether the rules remain relevant in light of technological changes in the United States.
The report, USMCA Automotive Rules of Origin: Economic Impact and Operation, 2023 Report, is required by section 202A(g)(2) of the USMCA Implementation Act (the Act) (19 U.S.C. § 4532(g)(2). The Act requires the USITC, an independent, nonpartisan, factfinding federal agency, to submit five biennial reports to the President, the House Committee on Ways and Means, and the Senate Committee on Finance. The next four reports are due in 2025, 2027, 2029, and 2031.
Detailed highlights of the Commission's findings can be found in the report's Executive Summary.
Select findings are detailed below.
As the USMCA has only been in force since July 1, 2020, and many of the ROOs have not been fully implemented due to staging, or phasing in, of requirements over a period of years, the full impact will likely not be apparent until the agreement is fully implemented, in 2027, or later.
For the period July 2020 through December 2022, the Commission’s economic modeling analysis indicated that the ROOs reduced U.S. imports of vehicle parts and increased U.S. revenues, employment, wage payments, and capital expenditures related to light vehicle and automotive parts production. The model also indicated that the ROOs increased the cost of producing light vehicles in the United States. The higher costs of U.S. vehicle production increased U.S. sales of imported light vehicle models from the rest of the world. Lower tariff preference utilization reduced U.S. imports of light vehicles from Canada and Mexico. These economic effects were concentrated in the automotive industry and had a negligible economy-wide impact. Read More→
https://www.usitc.gov/press_room/news_release/2023/er0630_64076.htm
