USMCA Faces A Delay

The United States-Mexico-Canada Free Trade Agreement will not take effect by June 1, after officials in the three countries failed to meet a necessary deadline this past Tuesday.

July 1 is now the earliest that the deal can take effect. According to the USMCA rules, the deal will enter into force “on the first day of the third month following the last notification” from each of the three countries certifying that they have met their obligations. Uniform regulations for auto rules and panelists for the USMCA dispute settlement still have not been agreed upon—a necessary step to implementing the deal. 

Some industries are relieved by the delay, including automakers that have been asking for additional time to adjust to the USMCA’s new rules. There had been concerns over their ability to meet the deadline, especially as they also face shutdowns and revamps of their production lines as they respond to COVID-19.

RV Industry Association members by now should be aware that USMCA maintains current rules of origin for RVs. While the new agreement increases the domestic content requirements for motor vehicles, the rules of origin will not change for RVs. Motorhomes will remain at 62.5 percent domestic content and travel trailers at 50 percent domestic content for duty-free treatment - the same as under current North American Free Trade Agreement rules.

The United States Trade Representative (USTR) has not offered any comments on the USMCA timeline. The Association will continue to monitor USCMA developments and update members on the implementation timeline.