24 January 2023
Canadian Custom Brokerage

CUSMA Panel concurs with Canada and Mexico on rules of origin for automotive goods

A Canada-United States-Mexico Agreement (CUSMA) dispute settlement panel issued its decision on an appeal filed by Mexico and Canada concerning the U.S. interpretation of the Agreement’s rules of origin for automotive products.

Last year Canada joined Mexico’s request to establish a dispute settlement panel to address the United States’ interpretation of the rules of origin governing the regional value content calculations that must be performed for a vehicle to qualify for CUSMA duty-free treatment.

The two countries claimed that the interpretation adopted by the United States in July 2020 is inconsistent with CUSMA and the understanding shared by the parties and stakeholders throughout the negotiations.

The Panel ruled in favour of Canada and Mexico and found the United States interpretation of the rules inconsistent with the Agreement.

In a statement to media a spokesperson for the U.S. Trade Representative said they are reviewing the Panel report and considering next steps.

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