On 11 January 2023, a five-member arbitral panel (“Panel”), which was established pursuant to Article 31 of the United States-Mexico-Canada Agreement (“USMCA”), made public a Final Report, dated 14 December 2022, that resolved the dispute related to the interpretation of the USMCA’s automotive rules of origin.
The Panel held that the U.S.’s current application of its interpretation of the rules of origin, prohibiting the practice of “rolling up” regional North American content, was inconsistent with the USMCA. Thus, core parts included in column 1 of Table A.2 of the Appendix to USMCA Chapter 4 (“core parts of Table A.2”) that qualify as originating as part of the “super-core” part calculation should also be treated as originating when calculating the Regional Value Content (“RVC”) of a finished vehicle.
How we can help
Deloitte’s Global Trade Advisory specialists are part of a global network of practitioners who can provide specialised assistance to companies in global trade matters. Deloitte’s Americas FTA Center of Excellence, comprised of practitioners from across the region, including a NAFTA/USMCA Task Force, can help companies seeking to manage the impacts and potential benefits, of the USMCA developments described above, as follows:
- Data Analysis – Analysing trade data to assess the company’s import and export footprint and identify products that are impacted by the USMCA rules of origin;
- Solicitation and certification – Providing services to solicit origin certifications from suppliers and drafting certificates of origin for finished goods exported within the USMCA region;
- Origin qualification – Reviewing product-specific requirements to confirm that goods meet the USMCA rules and may benefit from preferential duty treatment;
- Duty impact – Identifying potential savings opportunities based on the USMCA rules of origin;
- FTA processes – Reviewing potential changes to internal activities related to the solicitation of certifications of origin and origin qualification/certification;
- Operating model – Establishing a roadmap to define and implement an effective USMCA operating model, such as updates to process flows, work instructions, training materials, etc.
- Origin verification audit defense – Identify the documentation that needs to be maintained to support USMCA claims, and develop an origin qualification defense file that traces materials and components used in the production process for use as evidence in an origin verification audit;
- Origin verification – Providing support in managing responses to origin verification questionnaires or on-site visits from U.S., Mexican or Canadian customs authorities; and
- System support – Supporting the implementation and maintenance of ERP and Global Trade Management system tools used to qualify goods.