In perhaps the most important decision since the United States-Canada-Mexico Agreement (USMCA) entered into force in 2020 as a replacement for the North American Free Trade Agreement (NAFTA), a USMCA panel ruled on December 14, 2022, that the United States position on certain automotive rules of origin was inconsistent with the terms of the USMCA. The panel agreed with Mexico and Canada that the United States had sought to impose a requirement beyond the scope of the agreement and that the United States’s strict application of roll-up provisions and methodology in the treatment of originating core parts in vehicle regional value content (RVC) calculations were inconsistent with the agreement.
Source PwC
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