On June 3, 2020, the Office of the U.S. Trade Representative released the Uniform Regulations elaborating on the rules of origin in the United States-Mexico-Canada Agreement (“USMCA”). As the USMCA is slated to enter into force on July 1, 2020, the Uniform Regulations reflect the three parties’ consensus on how the USMCA’s rules of origin should be interpreted, applied, and administered, with especially noteworthy provisions relating to the automotive and textile and apparel industries.
The USMCA’s Uniform Regulations provide additional definitions and illustrative examples that demonstrate how the USMCA’s rules of origin are applied and are aimed to help ensure consistent and uniform treatment of the rules among the parties. Regarding automotive goods, the Uniform Regulations provide additional calculation rules and examples for use in complying with regional value content requirements, along with more precise steel and aluminum purchasing requirements. The Uniform Regulations do not, however, provide additional illustrative examples for the labor value content requirements and the labor certification requirements. Nor do the Uniform Regulations shed additional light on the status of the NAFTA Marking Rules, which U.S. Customs and Border Protection (“CBP”) will continue to enforce for now, though generally not as a condition for preferential treatment under the USMCA.
The Uniform Regulations are slated to take effect together with the USMCA on July 1, 2020. In the United States, CBP will amend Title 19 of the Code of Federal Regulations to implement the new substantive requirements of the USMCA and the Uniform Regulations. Until those regulations are promulgated, CBP issued “Interim Implementing Instructions” on April 16, 2020 to provide temporary guidance.
Our full analysis of the Uniform Regulations is available here. The links below enable easy access to each section:
- Background and Overview of the Uniform Regulations: We explain the context and structure of the Uniform Regulations.
- USMCA Country of Origin Overview: We provide an overview of key country of origin issues related to the USMCA.
- Textile and Apparel Rules of Origin: We cover the de minimis rules for non-originating materials and how different components of textile products are treated in the origin analysis.
- Automotive Rules of Origin: We survey regional value content rules and related calculation requirements for automotive goods.
- Labor Value Content Rules: We provide an overview of these new rules and preview forthcoming U.S. Department of Labor regulations.
- Steel and Aluminum Purchasing Requirements: We explain how the Uniform Regulations detail these new steel and aluminum purchasing requirements for automotive goods.
- Procedural Dimensions and Customs Modernization: We cover certifications of origin, transshipment’s effect on originating status, duty- and tax-free treatment of certain low value goods, and expanded scope of advance rulings.
- Implementation and Alternative Staging Plans: We cover the timeline for implementation and CBP’s guidance, and options for delayed implementation, such as alternative staging regimes for automotive producers.
- Policy Analysis: We look ahead and highlight key policy implications of the USMCA and Uniform Regulations.