Impact of the United States-Mexico-Canada Agreement (USMCA) Rules of Origin on the Automotive Sector in Mexico

  • María de Lourdes Álvarez Medina Universidad Nacional Autónoma de México

Abstract

The article aims to analyze the changes in the free trade agreement of the United States, Mexico, and Canada (USMCA) for the automotive industry, explaining the origin and impact on light vehicle production in Mexico. The new rules affect the drivers of location decisions for companies and positively influence the growth rate of the automotive industry in the region, but unevenly for the countries and companies involved. The regional content value of each automobile assembled in Mexico and sold in the United States in 2020 is analyzed to understand the dynamics of competition and protectionism. There is a strategy to increase automotive manufacturing in the region, especially in the United States. The agreement promotes import substitution, increasing the regionalization of the supply chain. German and Asian carmakers producing in Mexico will need more adjustments.

 

Keywords: Automotive Industry, USMCA, industry relocation, rules of origin, protectionism.

 

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Published
2021-08-31
How to Cite
Medina, M. de L. (2021). Impact of the United States-Mexico-Canada Agreement (USMCA) Rules of Origin on the Automotive Sector in Mexico. Norteamérica, Revista Académica Del CISAN-UNAM, 16(2). https://doi.org/10.22201/cisan.24487228e.2021.2.489
Section
DOSSIER