One of the key sectors gaining benefit from the USMCA trade agreement is the auto sector. Rules on steel and aluminum smelting/origination, and rules on part origination from North America are key aspects to the trade agreement that shifts focus from the import of Asian manufactured parts for assembly to manufacturing in North America.

Essentially, seventy-five percent of the component parts for the auto industry must be manufactured in North America. This shift directly puts U.S. auto-workers at the forefront for job gains & stops the process of using manufactured parts from China, Asia or the EU.

The goal of the agreement was/is to make manufacturing investment in North America the main consideration for auto-manufacturers who want access to the U.S. market. Today, as a direct result of future investment considerations, General Motors and Ford unexpectedly surprise 1,500 auto-workers with the announcement their jobs have gone from part-time to full-time status. Great news for these families:

DETROIT – General Motors’ worker Adarrey “Ace” Humphrey was blindsided Sunday. That’s when his life changed. Humphrey, 27, has been a part-time temporary worker at GM’s Flint Assembly in Michigan for the last three years. On Sunday morning, he and about 250 of his co-workers crowded into UAW Local 598’s union hall. Most thought they were there for a routine meeting.

But when the local’s president stepped to the mic, the room listened in awed silence. “He said, ‘As of tomorrow, you guys are full-time seniority employees of GM,’ ” Humphrey said. “There was a gasp in the room for a few seconds. Some of us thought he misspoke. Then, we had to say, ‘No, we heard him right!’ It was amazing.” On Monday, GM made about 930 temporary workers permanent full-time employees at 30 of its 52 UAW-represented facilities in the United States. There are more to come in the months ahead, it said. Ford Motor Co. also moved 592 temps to permanent full-time on Monday, the UAW said, and will do more conversions of temps next month. But Fiat Chrysler Automobiles is still working to implement its temporary worker conversions, said the UAW. (read more)

Promises made, and promises kept…

RULES OF ORIGIN AND ORIGIN PROCEDURES

The United States, Mexico, and Canada have concluded substantive discussions on new rules of origin and origin procedures, including product-specific rules for passenger vehicles, light trucks, and auto parts. This update to the rules of origin will provide greater incentives to source goods and materials in the United States and North America.

Key Achievement: Increasing Regional Value Content Rule

This deal encourages United States manufacturing and regional economic growth by requiring that 75 percent of auto content be made in North America.

The rules will:

Help to incentivize up to billions annually

Help to preserve and re-shore vehicle and parts production in the United States.

Transform supply chains to use more United States content, especially content that is key to future automobile production and high-paying jobs.

Close gaps in the current NAFTA agreement that incentivized low wages in automobile and parts production.

Key Achievement: Creating New Labor Value Content Rule

This deal uses trade rules to drive higher wages by requiring that 40-45 percent of auto content be made by workers earning at least $16 per hour.

The rules will:

Support better jobs for United States producers and workers by requiring that a significant portion of vehicle content be made with high-wage labor.

Ensure that United States producers and workers are able to compete on an even playing field, and incentivize new vehicle and parts investments in the United States.

Encourage more investment by auto companies in research and development in the region.

Key Achievement: Exceeding NAFTA 1.0 and TPP Standards with Stronger Rules of Origin and Enforcement

The United States, Mexico, and Canada have agreed to stronger rules of origin that exceed those of both NAFTA 1.0 and the Trans-Pacific Partnership (TPP), including for autos and automobile parts and other industrial products such as chemicals, steel-intensive products, glass, and optical fiber.

This deal exceeds NAFTA 1.0 and the TPP by establishing procedures that streamline certification and verification of rules of origin and that promote strong enforcement. This includes new cooperation and enforcement provisions that help to prevent duty evasion before it happens.

The new rules will help ensure that only producers using sufficient and significant North American parts and materials receive preferential tariff benefits. (USMCA Website)