USTR Releases Second Biennial Report on the Operation of the USMCA with Respect to Trade in Automotive Goods

July 01, 2024

WASHINGTON – United States Trade Representative Katherine Tai today released the second Report on the Operation of the United States-Mexico-Canada Agreement (USMCA) with Respect to Trade in Automotive Goods. The publication of the Report is pursuant to Section 202A(g)(1) of the United States-Mexico-Canada Agreement Implementation Act (Pub. L. 116-113).

“It is crucial that we ensure that this sector continues to thrive in North America, across all three countries, with good-paying jobs, empowered workers, and fair, market-oriented competition, especially as it transitions to new electric vehicle technologies,” said Ambassador Katherine Tai. “With just two years until the mandated six-year review of the USMCA, this report provides an important opportunity to utilize its findings, make adjustments, and fulfill the promise of the USMCA for our three countries.” 

The 2024 Report on the Operation of the USMCA with Respect to Trade in Automotive Goods can be viewed here. Additional information, including the first biennial report can be viewed here.

This biennial report, prepared by USTR in consultation with the Interagency Committee on Trade in Automotive Goods, examines the actions taken by auto producers to demonstrate compliance with the USMCA and whether the USMCA’s automotive rules of origin are effective and relevant in light of changing vehicle and production technologies. 

In the preparation of this report, USTR requested public input from automotive producers, labor organizations, associations, and other stakeholders.

The report finds that in the four years since the USMCA’s entry into force, the Agreement has had significantly positive economic impact on the U.S. and North American auto industry, benefitting producers, suppliers, and workers.  The automotive industry continues its unprecedented transition towards a zero-emissions future, while simultaneously preparing for full implementation of the USMCA rules of origin (ROOs) when special flexibilities afforded under alternative staging regimes begin to expire in 2025.  Auto producers have noted that additional flexibilities may be needed due to limitations of nascent domestic electric vehicle and battery manufacturing.  At the same time, other stakeholders have suggested modifications to the automotive rules of origin to better reflect the changing technologies in electric and autonomous vehicles and to incentivize the North American production of those newer components and technologies. 

The report also finds that some stakeholders would like greater transparency and information about the implementation and enforcement of the ROOs, including with regard to the labor value content requirements, while others identified administrative burdens in demonstrating compliance with the ROOs.    

USTR and the Interagency Autos Committee will consult and work closely with stakeholders to address these challenges and to find opportunities to continue to enhance the competitiveness of the North American automotive industry and its workers through the USMCA.