WASHINGTON/MEXICO CITY - U.S. negotiators have proposed raising the North American content requirement for vehicles to 82% as a condition for receiving preferential treatment under the U.S.-Mexico-Canada Agreement (USMCA), according to four people familiar with the U.S. negotiating position.
The outline presented during this week’s U.S.-Mexico negotiations in Mexico City would also require that 50% of the qualifying vehicle value be produced within the United States, the sources said. The proposal, as described to Reuters, contains no clause mandating any specific share of content to be produced in Canada, and Canada is not represented at the current talks.
If adopted, the suggested changes would represent a significant departure from the current USMCA rules. Under the existing agreement, passenger vehicles must contain 75% North American content to be eligible for preferential treatment. The present rules also include a high-wage jurisdiction requirement for certain core parts: 40% of the value of core parts for passenger cars must be produced in high-wage jurisdictions - effectively the United States or Canada - while the threshold for pickup trucks is 45%.
The U.S. proposal, as described by the sources, would raise overall regional content to 82% and allocate half of that content to U.S. production. The four people who provided these details characterized the shift as a major break from the existing provisions that link a portion of qualifying content to high-wage jurisdictions.
Details beyond the percentages and the fact that Canada is not present at the current negotiations were not provided by the sources. The proposal was disclosed during the bilateral talks between U.S. and Mexican negotiators in Mexico City.
Key factual points in the negotiating outline include the 82% North American content threshold, the 50% U.S.-sourced share, the absence of a Canadian content requirement in the current talks, and the contrast with the existing USMCA provisions that set a 75% North American content rule and require 40% (passenger cars) or 45% (pickup trucks) of core parts value to come from high-wage jurisdictions.