Mexican Media Brands
Carmakers Warn of High Compliance Costs for Updated NAFTA
Auto industry groups are warning that the complex local content rules proposed under the revised North American Free Trade Agreement will add costs and erode competitiveness, Automotive News reports.
#economics #regulations
Share
Auto industry groups are warning that the complex local content rules proposed under the revised North American Free Trade Agreement will add costs and erode competitiveness, Automotive News reports.
The new standards under the proposed U.S.-Mexico-Canada Agreement (USMCA) will raise the local content needed to qualify for duty-free shipping within the bloc to 75% from 62.5% required under NAFTA.
A new stipulation introduced by USMCA requires 40% of the content of such vehicles be made by workers within the region who are paid a minimum average $16 per hour. The Center for Automotive Research in Ann Arbor, Mich., has pointed out that calculating that figure may require carmakers to ask for labor cost data from their suppliers.
Such requirements will add new compliance procedures, impose “unnecessary complexity” on the industry and make the region less competitive with the rest of the world, the Assn. of Global Automakers complains.
The more optimistic American Automotive Policy Council, which represents the traditional Detroit carmakers, believes the USMCA provides enough flexibility while coping with the deal’s “challenges.”
RELATED CONTENT
-
Global Car Market to Shrink for 2-3 Years
Global sales of light vehicles will decline year on year through at least 2021, predicts LMC Automotive at its annual outlook conference outside Detroit, Mich.
-
On Global EV Sales, Lean and the Supply Chain & Dealing With Snow
The distribution of EVs and potential implications, why lean still matters even with supply chain issues, where there are the most industrial robots, a potential coming shortage that isn’t a microprocessor, mapping tech and obscured signs, and a look at the future
-
On Quantum Navigation, EVs, Auto Industry Sales and more
Sandia’s quantum navi, three things about EVs, transporting iron ore in an EV during the winter, going underwater in an EV (OK, it is a sub), state of the UK auto industry (sad), why the Big Three likes Big Vehicles, and the future of logistics.