Canada Announces It Will Join Mexico's Side in Dispute Over Auto ROO
A dispute panel that will consider whether the U.S. interpretation of auto rules of origin is too stringent will have Mexico and Canada on the too-strict side of the argument and the U.S. defending itself alone.
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Canadian Trade Minister Mary Ng, referring to USMCA as CUSMA, said that the auto chapter in the NAFTA rewrite was the result of close consultation with automotive stakeholders, with twin goals of more regional integration and supporting the competitiveness (or cost-effectiveness) of auto producers in North America.
"The interpretation that the United States adopted in July 2020 is inconsistent with CUSMA and the understanding shared by the parties and stakeholders throughout the negotiations," Ng said in a statement.
One of the major points of dispute is about roll-up -- while the qualification of supercore parts explicitly allows roll-up, the U.S. says that the non-North American content cannot count toward the overall vehicle regional value content.
Autos Drive America, a trade group that represents all automakers with U.S. manufacturing plants except Fiat-Chrysler, General Motors and Ford, said in response to the Canadian announcement: "Our members support an expeditious and fair resolution of this dispute and remain committed to the long-term success of their North American manufacturing operations and workforce."