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May
2020
3

Procedures for the Submission of Petitions by North American Producers of Passenger Vehicles or Light Trucks To Use the Alternative Staging Regime for the USMCA Rules of Origin for Automotive Goods

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Office of the United States Trade Representative.

Request for petitions.

For a limited period, a North American producer of passenger vehicles and light trucks (vehicle producer) may request an alternative to the standard staging regime for the rules of origin for automotive goods under the United States-Mexico-Canada Agreement (USMCA or the Agreement) using the procedures and guidance for submitting petitions in this notice.

To be assured of consideration, a vehicle producer must submit a petition with a draft alternative staging plan no later than July 1, 2020. A vehicle producer must submit a petition with its final alternative staging plan no later than August 31, 2020.

Submit petitions by email to USMCAAutosCommittee@ustr.eop.gov. For alternatives to email submissions, please contact Kent Shigetomi, Director for Multilateral Non-Tariff Barriers at (202) 395-9459 in advance of the deadline and before submission.

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Kent Shigetomi, Director for Multilateral Non-Tariff Barriers at (202) 395-9459.

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I. Introduction

A. Background

On June 12, 2017 (82 FR 23699), the President announced his intention to commence negotiations with Canada and Mexico to modernize the North American Free Trade Agreement (NAFTA). On November 30, 2018, the Governments of the United States, Mexico, and Canada (the Parties) signed the protocol replacing NAFTA with the USMCA. On December 10, 2019, the Parties signed the protocol of amendment to the USMCA.

The USMCA includes new rules of origin to claim preferential treatment for Start Printed Page 22239automotive goods, including higher Regional Value Content (RVC) thresholds, mandatory requirements to produce core parts in the region, mandatory steel and aluminum purchasing requirements, and a Labor Value Content (LVC) requirement. The Agreement allows vehicle producers to request an alternative staging regime for these requirements that would permit a longer period of transition to help ensure that future production is able to meet the new rules. The standard staging regime is specified under the Automotive Appendix to Chapter 4 of the USMCA (Automotive Appendix), with the exception of Article 8, which specifies provisions relating to the alternative staging regime. You can find information about the estimated impact of the USMCA rules of origin on investment, production, and employment in the U.S. automotive sector on the Office of the United States Trade Representative (USTR) website: https://ustr.gov/​trade-agreements/​free-trade-agreements/​united-states-mexico-canada-agreement/​us-automotive-sector.

B. Overview of the Alternative Staging Regime

The alternative staging regime differs from the standard staging regime by providing additional time and a different phase-in of the new requirements. It provides an alternative to certain rules of origin requirements for passenger vehicles and light trucks, but does not replace any other rules of origin or any provisions of general applicability for these goods to claim preferential treatment under the USMCA.

For instance, under an alternative staging regime, importers of certain passenger vehicles and light trucks will have an additional two years—five years instead of three—to meet the requirements, and the vehicles will have different RVC and LVC thresholds.

To qualify for an alternative staging regime, a vehicle producer must submit