On January 11, 2023, the United States-Mexico-Canada Agreement (USMCA) arbitral panel issued a final report regarding the interpretation of Article 3.7 of the Autos Appendix of the agreement and its relationship with Article 4.5. The dispute centered around which auto parts are considered originating in the calculation of the vehicle’s regional value content (RVC). The final determination was:

“The Panel concludes the Agreement does not include a separate, self-standing core parts “origination requirement”, and thus core parts in Column 1 of Table A.2 that are originating under Article 3.7 through the application of the methodologies in Articles 3.8 and 3.9 can be included as originating material in the calculation of the RVC of a vehicle.”

The final report can be found here:

https://ustr.gov/sites/default/files/enforcement/FTA/USMCA%2031/USMCAAutomotive%20ROO.pdf