Automotive rules of origin summary

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Rules of origin are the criteria used to determine whether a good has undergone sufficient production in the Canada-United States-Mexico Agreement (CUSMA) region to be eligible for preferential tariff treatment. They ensure that the benefits of the agreement accrue primarily to producers located in CUSMA countries.

The new automotive rules of origin include elements that will require increased levels of North American content in order to incentivize production and sourcing in North America. The final outcome builds on many ideas consistent with Canada’s goal of strengthening the North American production platform, incentivizing production in North America and encouraging the use of North American steel and aluminum. Throughout the negotiations, Canada focused on modernizing the automotive rules of origin while seeking to maintain the competitiveness of the North American auto industry. This outcome achieves that objective.

The rules of origin for autos will support Canadian companies in the sector and the Canadians they employ. They will also strengthen Canada’s competitive advantage, help keep facilities in Canada and promote good, well-paying jobs for Canadians.

While automotive companies in Canada and their industry associations were not actively seeking significant changes to automotive rules of origin, they have been actively engaged in the modernization process and are supportive of the final outcome.

Technical summary of negotiated outcomes: Automotive rules of origin

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