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USMCA Panel on the Application and Interpretation of the Rules of Origin in the Automotive Sector

On March 22, 2022, Mexico, Canada and the United States selected the members of the Panel that will resolve the dispute over the application and interpretation of certain provisions related to the rules of origin in the automotive sector, specifically the so-called «essential» and supercore auto-parts, of the United States, Mexico and Canada Agreement (hereinafter “USMCA”).

Application and Interpretation of Rules of Origin | Trading Room

Consultations on the Application and Interpretation of the Rules of Origin in the Automotive Sector  Pursuant to Article 31.4 of the USMCA, on August 20, 2021, the Mexican Ministry of Economy, formally requested consultations with the Government of the United States regarding conflicting positions on the interpretation and application of the rules of origin applicable to the automotive sector. 

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The Composition of the Panel

In accordance with Article 31.9, paragraph 2 of the USMCA, the panel is composed of a chair, two panelists appointed by the U.S. (respondent party) and one panelist each appointed by Mexico and Canada.

  • Elbio Rosselli – chair of the Panel
  • Kathleen Claussen – appointed by Canada;
  • Ann Ryan Robertson – appointed by Mexico;
  • Jorge Miranda -designated by the United States
  • Donald McRae -designated by the United States; 

Panel Disputes

Now, for the composition of the panel, according to Chapter 31 of the USMCA (Article 31.8 paragraph 1) the parties maintain a list of up to 30 individuals who are willing to serve as dispute settlement panelists. Such individuals must meet a number of requirements (Article 31.8 paragraph 2) in order to be included in the roster and to be considered as panelists.

Notwithstanding the existence of the roster, the parties may select panelists who are not included in the roster. Such is the case of the two panelists selected by the U.S.: Jorge Miranda and Donald McRae. 

Next Steps for the Panel

In accordance with the Rules of Procedure, the panel will establish a procedural timetable and the complaining parties will file their «initial» brief within seven (calendar) days after the selection of the last panelist. VTZ will be closely following the proceeding of this dispute.

Initial report

VTZ wishes to emphasize that, from the date of appointment of the last panelist, the panel shall normally submit a preliminary report within a period of maximum 150 days, i.e. August 19, 2022, in accordance with Article 31.17 of the USMCA. In the event that the panel considers that it is not possible to issue a report within that period, it will have an additional 30 days, i.e. it could be extended to September 18, 2022.

Once the preliminary report is submitted, the parties will have 15 days to formulate observations. After which, the panel may request additional opinions, reconsider its report or conduct additional reviews.

Final report

Finally, the panel will submit a final report no later than 30 days after the submission of the preliminary report; the final report should be made public no later than 15 days. In theory, the final report on this dispute should be due in August of this year, but we may expect a bit of delay, expecting a report on October per previous experiences. 

Source: Chapter 31 USMCA

USMCA disputes

As noted in our special post on USMCA disputes, the first USMCA panel concerning the U.S. dispute against Canada on dairy preferential quotas sheds light on the time frame.

This USMCA panel took less than a year, 209 days, from the establishment of the panel to the issuing of the decision. In other words, the panel was established on May 25, 2021, and the final report was issued on December 20, 2021, when it should have been issued by October.

Ministry of Economy - Invest in Mexico - Business Center

In December 2021, the Ministry of Economy (SE) presented the digital platform «Invest in Mexico». This platform was created «to provide foreign investors with executive content and strategic statistical information, specialized advice and links with institutions responsible for the necessary procedures for investment, in addition to serving as a direct contact with the agencies responsible for the promotion and attraction of investment». In this regard, our Jr. Partner, Emilio Arteaga,  made a detailed analysis of the platform.

As part of this initiative, the SE announced the opening of a Business Center.

The Business Center seeks to create a workspace within the facilities of the Ministry of Economy so that the Global Economic Intelligence Unit can provide personalized support to potential foreign investors in establishing, growing and promoting their businesses in Mexico.

Need more information?

VTZ is a firm specialized in International Trade and Customs and IMMEX with a team with extensive experience, contact our members today:

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