Statement on implementation of rules of origin for automotive goods under Canada-United States-Mexico Agreement

Global Affairs Canada

The Honourable Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development, today issued the following statement regarding Canada’s intention to join Mexico as a complaining party against the U.S. interpretation of the automotive rules of origin under Chapter 31 of the Canada-United States-Mexico Agreement (CUSMA):

“The CUSMA rules of origin for passenger cars and light-duty trucks are aimed at encouraging production and sourcing in North America. The outcome was the result of negotiations and close consultations with automotive stakeholders, which ensured that these new rules of origin would deepen regional integration and support the competitiveness of automotive producers in North America.

“Canada is joining 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 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.

“The Government of Canada will always stand up for our auto industry and workers as we build toward a sustainable economic recovery.”

“Canada, Mexico and the United States would all benefit from certainty that CUSMA is being implemented as negotiated, and Canada is optimistic that a dispute settlement panel will help ensure a timely resolution of this issue.”

Quick facts

  • Canada joined consultations initiated by Mexico with the United States under Chapter 31 of CUSMA in August 2021. Trilateral consultations were held on September 24, 2021.
  • There have been informal, trilateral technical discussions that have taken place following entry into force in July of 2020.
  • Mexico requested the establishment of a dispute settlement panel on this issue on January 6, 2022.
  • In the timeline provided under CUSMA, the dispute settlement panel would be expected to issue a report in the summer of 2022.
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