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US Senate Approves the USMCA
POSTED 01/22/2020
| By: Carlos Calderon, Manager
Here’s a quick refresher of some of the main changes for this new USMCA to evaluate the potential impacts on your business:
Automotive Industry
- Changes related to rules of origin; specifically increasing the North American content
- Over time, light vehicles will change the requirement from 62.5% – 75% of North American parts
- Changes to the parts content, now split into core, principal and complementary parts requiring 75%, 65% and 60%, respectively
- 40% of automobiles and 45% of light trucks to be produced with an average labor wage of $16/ hr.
- New quotas
- 6 million Mexican and Canadian vehicles
- Auto parts imports: $32.4 billion from Canada and $108 billion from Mexico
General
- Strong labor controls for Mexico, with a greater ability for workers to unionize
- Enhanced protections for intellectual property
- Pharmaceutical patents now valid for a 10-year term
- Copyright valid 70 years after the author´s death
- The terms of the USMCA will remain in effect for 16 years (sunset provision) after which time the parties can renegotiate terms. However, after 6 years the terms of the sunset provision can be revisited.