EPI Senior Economist Adam S. Hersh submitted the following written testimony to the U.S. International Trade Commission regarding Investigation No. 332-600,“USMCA Automotive Rules of Origin: Economic Impact and Operations, 2025 Report.”Dear Commissioners:Thank you for the opportunity to comment on the upcoming 2025 Report on the USMCA Automotive Rules of Origin. Although these rules are only really beginning to come into effect, it is already clear that the incremental tightening—along with the labor Rapid Response Mechanism—are insufficient to overcome the fatal flaws in the NAFTA model that allowed multinational producers to threaten and actually relocate work to lower-wage and more readily exploitable places like Mexico. i Thirty years after the start of NAFTA, this corporate strategy is still suppressing wages for motor vehicle and parts workers and their communities in all 3 countries. USMCA has done little to change this equation and the updated Rules of Origin (ROOs) seem unlikely to change the course dwindling job quality and quantity in the U.S. motor vehicles and parts industries.
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Table of Contents
- Testimony prepared for the U.S. International Trade Commission report on the USMCA Automotive Rules of Origin 1
- ROOs are too leaky to ensure high quality jobs 1
- The impact of loose ROOs 2
- Increasing Chinese penetration of North American motor vehicle supply chains 2
- Benchmarking ROOs impact on corporate operations 3
- Figure 1 3
- Figure 2 3
- Figure 3 3
- Figure 4 3
- Figure 5 3
- Figure 6 3
- Figure 7 3
- Table 1 4
- Notes 4
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