Procedures for the Submission of Petitions by North American Producers of Passenger Vehicles or Light Trucks To Use the Alternative Staging Regime for the USMCA Rules of Origin for Automotive Goods
| Citation | 85 FR 22238 |
| Record Number | 2020-08405 |
| Published date | 21 April 2020 |
| Section | Notices |
| Court | Trade Representative Office Of The United States |
Federal Register, Volume 85 Issue 77 (Tuesday, April 21, 2020)
[Federal Register Volume 85, Number 77 (Tuesday, April 21, 2020)]
[Notices]
[Pages 22238-22244]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08405]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Procedures for the Submission of Petitions by North American
Producers of Passenger Vehicles or Light Trucks To Use the Alternative
Staging Regime for the USMCA Rules of Origin for Automotive Goods
AGENCY: Office of the United States Trade Representative.
ACTION: Request for petitions.
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SUMMARY: For a limited period, a North American producer of passenger
vehicles and light trucks (vehicle producer) may request an alternative
to the standard staging regime for the rules of origin for automotive
goods under the United States-Mexico-Canada Agreement (USMCA or the
Agreement) using the procedures and guidance for submitting petitions
in this notice.
DATES: To be assured of consideration, a vehicle producer must submit a
petition with a draft alternative staging plan no later than July 1,
2020. A vehicle producer must submit a petition with its final
alternative staging plan no later than August 31, 2020.
ADDRESSES: Submit petitions by email to
[email protected]. For alternatives to email
submissions, please contact Kent Shigetomi, Director for Multilateral
Non-Tariff Barriers at (202) 395-9459 in advance of the deadline and
before submission.
FOR FURTHER INFORMATION CONTACT: Kent Shigetomi, Director for
Multilateral Non-Tariff Barriers at (202) 395-9459.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Background
On June 12, 2017 (82 FR 23699), the President announced his
intention to commence negotiations with Canada and Mexico to modernize
the North American Free Trade Agreement (NAFTA). On November 30, 2018,
the Governments of the United States, Mexico, and Canada (the Parties)
signed the protocol replacing NAFTA with the USMCA. On December 10,
2019, the Parties signed the protocol of amendment to the USMCA.
The USMCA includes new rules of origin to claim preferential
treatment for
[[Page 22239]]
automotive goods, including higher Regional Value Content (RVC)
thresholds, mandatory requirements to produce core parts in the region,
mandatory steel and aluminum purchasing requirements, and a Labor Value
Content (LVC) requirement. The Agreement allows vehicle producers to
request an alternative staging regime for these requirements that would
permit a longer period of transition to help ensure that future
production is able to meet the new rules. The standard staging regime
is specified under the Automotive Appendix to Chapter 4 of the USMCA
(Automotive Appendix), with the exception of Article 8, which specifies
provisions relating to the alternative staging regime. You can find
information about the estimated impact of the USMCA rules of origin on
investment, production, and employment in the U.S. automotive sector on
the Office of the United States Trade Representative (USTR) website:
https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement/us-automotive-sector.
B. Overview of the Alternative Staging Regime
The alternative staging regime differs from the standard staging
regime by providing additional time and a different phase-in of the new
requirements. It provides an alternative to certain rules of origin
requirements for passenger vehicles and light trucks, but does not
replace any other rules of origin or any provisions of general
applicability for these goods to claim preferential treatment under the
USMCA.
For instance, under an alternative staging regime, importers of
certain passenger vehicles and light trucks will have an additional two
years--five years instead of three--to meet the requirements, and the
vehicles will have different RVC and LVC thresholds.
To qualify for an alternative staging regime, a vehicle producer
must submit a petition with the information described in Section III,
including a detailed and credible plan if the quantity of vehicles for
which the producer requests an alternative staging regime exceeds a ten
percent threshold. A plan could include commitments to make additional
investments in the United States and North America, or additional
purchases of U.S. and North American parts. You can find more
information on the criteria for acceptance of a plan in Section IV.
Because of the integrated nature of the North American auto industry
and market, USTR will coordinate with the governments of Canada and
Mexico throughout the alternative staging process.
C. Definition of Vehicle Producer, Passenger Vehicle, and Light Truck
A `vehicle producer' is a producer of passenger vehicles or light
trucks in the territory of the United States, Mexico, or Canada. The
definitions of ``passenger vehicle'' and ``light truck'' are in Article
1 of the Automotive Appendix.
D. Timing of Petitions for the Alternative Staging Regime
A vehicle producer must submit a petition with a draft alternative
staging plan by July 1, 2020. If USTR and the Interagency Committee on
Trade in Automotive Goods (Committee) established in Executive Order
13908 of February 28, 2020 identify any deficiencies in a vehicle
producer's draft alternative staging plan, the vehicle producer must
submit a petition with a final draft alternative staging plan
correcting those deficiencies no later than August 31, 2020. If USTR
and the Committee do not identify any deficiencies in a vehicle
producer's draft alternative staging plan, the vehicle producer must
submit a petition with a final draft alternative staging plan with any
modifications, or a statement requesting that its draft alternative
staging plan be considered final, no later than August 31, 2020. If a
producer has questions about the content of a petition, it should
contact Kent Shigetomi, Director for Multilateral Non-Tariff Barriers
at (202) 395-9459, as soon as possible and well in advance of the
deadlines and before submission. USTR will not consider any petition
submitted after the relevant dates, unless there is a good cause and
the producer has made arrangements with USTR in advance of the
deadline. For clarity, a vehicle producer is not required to submit a
petition for an alternative staging regime if it intends to claim
preferential treatment using the standard staging regime. However, if a
vehicle producer is unsure about whether to request an alternative
staging regime, it should do so under this notice. If USTR grants use
of an alternative staging regime, a vehicle producer still can make
claims for preferential tariff treatment under the standard staging
regime if it determines it no longer requires use of the alternative
staging regime.
The alternative staging regime is valid for five years after the
entry into force of the Agreement unless the vehicle producer requests
a longer period and it is accepted by USTR and the Committee. After
expiration of the alternative staging period, all claims of
preferential treatment for passenger vehicles and light trucks must
meet the rules described under the standard USMCA rules in the
Automotive Appendix.
II. Eligibility To Use the Alternative Staging Regime
A. Covered Vehicle Producer
A vehicle producer may submit a petition to use an alternative
staging regime if the importer of the vehicles intends to make a claim
of preferential treatment under the USMCA upon or after entry into
force of the Agreement, and the producer has determined that it will be
unable or unlikely to be able to meet the rules of origin under the
standard staging regime or the standard USMCA rules of origin for
automotive goods for such claims upon entry into force.
B. Ten Percent of Production
The quantity of passenger vehicles or light trucks eligible for an
alternative staging regime is limited to 10 percent of a vehicle
producer's total passenger vehicle or light truck production during the
12 month period prior to entry into force of the Agreement, or the
average of such production during the complete 36 month period prior to
entry into force of this Agreement, whichever is greater. A vehicle
producer may request quantities above this limit if it provides a
detailed and credible plan that ensures that these vehicles will meet
all the requirements during the alternative staging regime period and
the requirements under the Automotive Appendix after the expiration of
the alternative staging period. Sections C and D below provide further
information about these requirements, and Section III outlines the
necessary components of a detailed and credible plan.
C. Requirements During the Alternative Staging Period
Under the alternative staging regime, eligible passenger vehicles
or light trucks will be considered originating under the USMCA if they
meet the following requirements:
a. An RVC threshold of no less than 62.5 percent, under the net
cost method, for eligible passenger vehicles or light trucks.
b. An RVC threshold of no less than 62.5 percent, under the net
cost method, or 72.5 percent under the transaction value method if the
corresponding rule includes a transaction value method, for parts
falling under Table A.1 of the Automotive Appendix, except for
[[Page 22240]]
batteries of subheading 8507.60, that are used in the production of
such eligible passenger vehicles or light trucks.
c. At least 70 percent of a vehicle producer's purchases of steel
and at least 70 percent of a vehicle producer's purchases of aluminum,
by value, must be originating per the requirements outlined in Article
6 of the Automotive Appendix. If a vehicle producer demonstrates the
existence of contracts, MOUs, or other similar types of business
agreements or information to meet this requirement during the
alternative staging period, that producer will be exempt from having to
certify to this requirement during the alternative staging period. A
vehicle producer should provide this information in the petition
outlined in Section III.
d. An LVC threshold of at least 25 percent, consisting of at least
10 percentage points of high-wage material and manufacturing
expenditures, no more than 10 percentage points of high-wage technology
expenditures, and no more than 5 percentage points of high-wage
assembly expenditures.
All methods and calculations for the requirements or thresholds
described above should be made according to the applicable provisions
in Chapter 4 of the Agreement. Notwithstanding these requirements or
thresholds, all other product-specific rules of origin and all other
applicable requirements of the Agreement will apply to such goods
during the alternative staging regime period, with the exception of the
core parts requirement described under Article 3.7 of the Automotive
Appendix. Passenger vehicles and light trucks deemed eligible for an
alternative staging regime will be exempt from the core parts
requirement during the alternative staging period.
D. Requirements After the Alternative Staging Period
After the expiration of the applicable alternative staging period,
all passenger vehicles or light trucks, or automotive parts for such
vehicles, will be considered originating under USMCA if they satisfy
the rules specified under the Automotive Appendix. These rules include:
a. An RVC threshold of no less than 75 percent, under the net cost
formula.
b. An RVC threshold of no less than 75 percent, under the net cost
formula, or 85 percent under the transaction value method if the
corresponding rule includes a transaction value method, for parts
classified in Table A.1 of the Automotive Appendix used in the
production of such eligible passenger vehicles or light trucks.
c. Compliance with the core parts requirement specified under
Article 3.7 of the Automotive Appendix.
d. At least 70 percent of a vehicle producer's purchases of steel
and at least 70 percent of a vehicle producer's purchases of aluminum
must be originating per the methodology described in Article 6 of the
Automotive Appendix.
e. An LVC threshold of at least 40 percent for a passenger vehicle,
consisting of at least 25 percentage points of high-wage material and
manufacturing expenditures, no more than 10 percentage points of high-
wage technology expenditures, and no more than 5 percentage points of
high-wage assembly expenditures.
f. An LVC threshold of at least 45 percent for a light truck,
consisting of at least 30 percentage points of high-wage material and
manufacturing expenditures, no more than 10 percentage points of high-
wage technology expenditures, and no more than 5 percentage points of
high-wage assembly expenditures.
g. All other applicable requirements of Chapter 4.
E. Requirements for 403.6 Vehicles
Notwithstanding Section C above, a vehicle producer may request to
continue using the regulations implementing the NAFTA rules of origin
provisions of General Note 12, HTSUS, and Chapter Four of the NAFTA
that were in effect prior to entry into force of the USMCA (e.g., 19
CFR chapter I, 1994 edition, appendix to part 181) for vehicles that
were covered under the alternative staging regime described in Article
403.6 of NAFTA as of the date of signature of USMCA, November 30, 2018.
Requests will be subject to approval of a vehicle producer's
alternative staging petition and the NAFTA regulations only will apply
to such vehicles for the remainder of the period under the Article
403.6 alternative staging regime. After the expiration of the period
under the Article 403.6 alternative staging regime and until the end of
the permitted USMCA alternative staging period, these vehicles will
need to meet the requirements under Section C or D to be eligible for
preferential tariff treatment during the permitted alternative staging
regime under the USMCA. After the expiration of the permitted USMCA
alternative staging period, these vehicles will need to meet the
requirements under Section D to be eligible for preferential tariff
treatment under the USMCA.
III. Information Required in Petition
A vehicle producer requesting to use an alternative staging regime
must submit a petition containing the following information:
A. Cover Letter
a. Request for Use of the Alternative Staging Regime. Identify
vehicle models that would be subject to the alternative staging regime
and the share these vehicles represent of the company's North American
production.
b. Statement of Period of Alternative Staging Regime. Identify the
period of alternative staging the company is requesting for each
vehicle model, noting in particular the introduction date of each model
and the period of each model cycle. For specific vehicle models with a
model cycle that extends beyond five years from the date of entry into
force of the Agreement, the petition must include a specific request to
extend the applicability of the alternative staging plan beyond five
years to those specific vehicle models.
c. Commitment to Meet the Requirements During and After Expiration
of the Alternative Staging Regime. A petitioner must certify that it
will meet the requirements for the alternative staging regime set out
in Section II.C, for requested vehicle models claiming USMCA
preferential treatment during the entirety of the alternative staging
period. Additionally, petitioners must certify that vehicle models for
which USTR grants an alternative staging regime will meet the
requirements set out in Section II.D upon expiration of the alternative
staging regime and confirm thereafter for all vehicles claiming USMCA
preferential treatment.
d. Understanding of Requirement to Notify Modifications to Plan. A
vehicle producer must state that it will notify USTR and the Committee
as soon as practicable, of any material changes to the information
contained in the petition that will affect the producer's ability to
meet any of the requirements set forth in Articles 2 through 7 of the
Automotive Appendix after the alternative staging period has expired. A
vehicle producer may submit to the Committee a request for modification
of its plan with respect to such changes and provide a list of the
material changes to the information contained in the petition,
including any supplemental information relating to the petition, and of
any material changes to circumstances that will affect the producer's
ability to meet any of the requirements set for in Articles 2 through 7
of the Automotive Appendix
[[Page 22241]]
after the alternative staging period has expired.
e. Statement of Confidentiality of Information. For any electronic
submission that contains business confidential information, the file
name should begin with the characters `BC'. Any page containing
business confidential information must be clearly marked ``BUSINESS
CONFIDENTIAL'' on the top of that page and the submission should
clearly indicate, via brackets, highlighting, or other means, the
specific information that the petitioner contends is business
confidential. If business confidential treatment is requested, a
petitioner must certify in writing that it is private commercial or
financial information that would not customarily be released to the
public. A petitioner also should certify that the information concerns
or relates to trade secrets, shipments, processes, operations, or other
information of commercial value, the disclosure of which is likely to
cause substantial harm to the competitive position of the company. USTR
will treat properly marked business confidential information as
private.
B. Corporate Information
a. Corporate name of parent company.
b. Corporate address, phone number, and website address of global
headquarters.
c. Corporate address, phone number, and website address in the
United States.
d. Corporate address, phone number, and website address in Canada.
e. Corporate address, phone number, and website address in Mexico.
f. Overview of the corporate structure in North America and
relationship to the parent company.
g. Name, title, phone number, and email address of the senior
executive certifying submission in the United States, Canada, and
Mexico.
C. Assembly Capacity
Provide information about the company's vehicle assembly, engine
assembly, transmission assembly, and advanced battery assembly
capacity, and note if such capacity would be originating under the
product-specific rules under the Automotive Appendix. Include
information regarding any new assembly capacity that the petitioner
plans to install within five years of entry into force of the USMCA,
and note the date of completion of the new production capacity.
Information should include:
a. Three-shift annual production capacity of existing vehicle
assembly plants in North America (by plants) in calendar year 2019.
b. Three-shift annual production capacity of existing engine plants
in North America (by plants) in calendar year 2019.
c. Three-shift annual production capacity of existing transmission
plants in North America (by plants) in calendar year 2019.
d. Three-shift annual production capacity of existing advanced
battery plants in North America (by plants) in calendar year 2019. If
production is in partnership with another company, please identify the
partner and type of relationship.
D. Production
Provide the following information:
a. Corporate structure of production assets in the United States,
Canada, and Mexico.
b. List of North American production facilities by location and
type (e.g., vehicle assembly, engine assembly, transmission assembly,
and advanced battery assembly).
c. Total number of vehicles assembled in the United States, Canada,
and Mexico (by country, plant, and model), in calendar years 2017,
2018, and 2019, and projections for calendar years 2020-2025.
d. Total value of self-produced auto parts in the United States,
Canada, and Mexico (by country) in calendar year 2019.
e. Total value of purchased auto parts produced in the United
States, Canada, and Mexico (by country) in calendar year 2019.
f. Total value of purchased non-North American imported auto parts
in the United States, Canada, and Mexico (by country) in calendar year
2019.
E. Sales
Provide the following information:
a. Corporate structure of vehicle distribution and sales in the
United States, Canada, and Mexico.
b. Total number of vehicles assembled in the United States that are
sold in the United States, Canada, and Mexico (by country and by
model), in calendar years 2017, 2018, and 2019, and projections for
calendar years 2020-2025.
c. Total number of vehicles assembled in Canada that are sold in
the United States, Canada, and Mexico (by country and by model), in
calendar years 2017, 2018, and 2019, and projections for calendar years
2020-2025.
d. Total number of vehicles assembled in Mexico that are sold in
the United States, Canada, and Mexico (by country and by model), in
calendar years 2017, 2018, and 2019, and projections for calendar years
2020-2025.
F. Vehicle Models
Provide the following information for vehicles assembled in the
United States, Canada, and Mexico (by country) for which alternative
staging is being requested:
a. Describe the company's sourcing timelines with respect to new
vehicle model introductions, next-generation vehicle model
introductions, and mid-cycle vehicle updates.
b. Date (month and year) of the start of each current vehicle
model's production.
c. Date (month and year) of the mid-cycle refresh of each current
vehicle model's production.
d. Date (month and year) of the planned start of the next
generation of each vehicle model's production.
e. For vehicles for which production began prior to entry into
force of the USMCA, identify the actual or estimated RVC for those
vehicle models under both the NAFTA rules of origin and the USMCA rules
of origin. Also, provide the estimated RVC for core parts for each of
these vehicle models.
f. For vehicles for which production begins after entry into force
of the USMCA, identify the estimated RVC for those vehicle models under
the USMCA rules of origin. Also, provide the estimated RVC for core
parts for each of these vehicle models.
g. Provide the date (month and year) when each current or new
vehicle model will be fully compliant with the USMCA rules of origin.
G. Steel and Aluminum
a. Provide the value of corporate purchases of steel in North
America in calendar year 2019 (by country and total), including direct
purchases, directed-buy purchases, and the estimated value of steel
used in the production of purchased major body stampings and chassis
frames.
b. Provide the value of corporate purchases of aluminum in North
America in calendar year 2019 (by country and total), including direct
purchases, directed-buy purchases, and the estimated value of aluminum
used in the production of purchased major body stampings and chassis
frames.
c. Provide an estimate of the percentage of the total North
American steel purchases and North American aluminum purchases,
respectively, which is originating in North America according to the
product-specific rules identified in Chapter 4 of the Agreement. For
this percentage, the vehicle producer need only estimate
[[Page 22242]]
purchases of flat-rolled steel or aluminums in coils; tubes, pipes or
hollow profiles of steel or aluminum; and any other structural steel or
aluminum used in the production of major body stampings or chassis
frames for passenger vehicles or light trucks.
H. Wages
a. Provide the company's expenditures on wages for Research and
Development (R&D) and Information Technology (IT) in North America for
2019. R&D expenditures include expenditures for research and
development including prototype development, design, engineering,
testing, or certifying operations. IT expenditures include expenditures
on software development, technology integration, vehicle
communications, and information technology support operations.
b. Provide the company's total expenditures on wages to direct
production workers in North America for 2019.
c. Provide the ratio of the expenditures of paragraph (a) to
paragraph (b), expressed as a percentage.
I. Detailed and Credible Plan
A detailed and credible plan must contain the following
information:
a. A description of how the requested alternative staging vehicle
models meet each of the necessary requirements for acceptance into the
alternative staging regime as identified in Section II of this notice.
b. A description of the changes the company plans to make to its
operations, sourcing, and vehicle content to meet the USMCA rules of
origin for each of the alternative staging vehicle models, as well as
the company's ability to meet the requirements for steel, aluminum, and
LVC. Provide detailed information regarding investments, sourcing
changes, jobs, and other procurement or operational changes that
demonstrate that these plans are detailed and credible. Address each of
the requirements for RVC, core parts, steel and aluminum, and LVC, and
how such changes will allow each vehicle model to comply with the USMCA
rules of origin.
c. An annual calendar of new investments, sourcing changes, jobs,
and other changes to operations, beginning with changes that occurred
in calendar year 2019, and plans for 2020-2025.
d. A description of the corporate approval process for investments,
sourcing changes, and other operational changes identified in the
company's plans.
J. Certification
a. Provide a certification that all vehicle models requested under
alternative staging will meet the standard automotive rules at the end
of the alternative staging period.
b. Confirm that the company will communicate any modifications to
the information in the petition to the Committee as soon as
practicable.
c. Provide the title, signature, and contact information of the
certifying official.
IV. Procedures for Reviewing and Accepting Petitions
A. USMCA Interagency Committee on Trade in Automotive Goods
USTR will make determinations based on the information contained in
a vehicle producer's petition for use of an alternative staging regime.
In making such determinations, USTR will seek advice from the
Committee, which has been authorized to provide advice, as appropriate,
on the implementation, enforcement, and modification of provisions of
the Agreement that relate to automotive goods, including the automotive
rules of origin and the alternative staging regime that are part of
such rules.
B. Criteria for Approval
a. Ten Percent Threshold
If the passenger vehicles or light trucks covered by the petition
for an alternative staging regime are not more than ten percent of the
vehicle producer's total passenger vehicle or light truck production in
the territories of the United States, Canada, and Mexico according to
the calculation methodology described under Article 8.3 of the
Automotive Appendix, then no other information--other than the
information under Section III.A--is required in order for such vehicles
to be eligible to receive preferential tariff treatment under the
alternative staging requirements. If the petition is for a quantity of
vehicles greater than ten percent according to the same methodology,
then the vehicle producer must include all the information in Section
III in its request.
b. Above Ten Percent Threshold
If the passenger vehicles or light trucks covered by the petition
for the alternative staging regime are greater than ten percent of the
petitioner's total passenger vehicle or light truck production in the
territories of the United States, Canada, and Mexico, evaluation of the
petition will be based on the level of detail and credibility of the
information supplied in accordance with Section III. The petitioner
should identify the specific vehicle models it estimates will not meet
the standard staging regime under the Automotive Appendix upon entry
into force of the Agreement. The petitioner also should identify any
North American investments and sourcing, preferably by calendar year
and location, which will allow such vehicles to meet the standard USMCA
rules after the expiration of the alternative staging period. Consider
the following examples:
As part of the plan outline in Section III, a vehicle
producer might request the alternative staging regime for certain
vehicle models representing more than ten percent of its vehicle
production in the United States, Canada, and Mexico. The petitioner
might indicate that a specific vehicle model is unable to meet the
rules under the standard staging regime, because it can meet a vehicle
RVC of only 64 percent, a core parts RVC of only 68 percent (as certain
core parts or key components used to make such core parts are not
produced in North America), and an LVC materials and manufacturing
percentage of only 8 percent. The producer should then provide details
on specific investments and sourcing that will allow the vehicle to
meet the standard USMCA rules after the expiration of the alternative
staging period.
A producer might describe the North American sourcing of
engine or transmission components to meet the vehicle RVC and core
parts RVC requirements, an advanced battery in a high-wage North
American plant or facility to meet the LVC requirement, and additional
purchases of originating steel or aluminum to meet the steel and
aluminum purchasing requirements. The petition does not need to include
this specific sourcing information if the vehicle producer can
demonstrate other actions it will take in order to meet the rules. If
the vehicle producer does not provide sufficient detail or the petition
has missing information, then USTR may not accept the petition as a
`detailed and credible' plan.
USTR may consider a petition insufficiently detailed if it
does not identify the vehicle models for which it is requesting use of
the alternative staging regime, fails to describe how they are not
compliant with the standard rules, or fails to describe the planned
actions under Section III to bring these vehicles into compliance with
the requirements after the
[[Page 22243]]
alternative staging period. USTR may deem a plan not credible if the
producer provides investment or sourcing plans the company's management
has not approved, or does not include any supplemental information that
supports the plan, such as location of planned additional investments
or parts sourcing. If the vehicle producer provides sufficient
information under Section III for all vehicles covered by the petition
for alternative staging and the information is not false or misleading,
then USTR will consider the petition as ``detailed and credible''.
C. Providing a Determination
USTR, in consultation with the Committee, will promptly determine
whether to authorize use of the alternative staging regime. USTR will
provide the determination in writing to the producer. If USTR denies
the petition, the vehicle producer may request the reasons for the
denial.
D. Notification of Any Deficiencies in Petition
No later than 30 days after receipt of a petition, USTR, in
consultation with the Committee, will notify the petitioner if there
are deficiencies, such as missing, inaccurate, or imprecise information
that would result in the denial of the petition. No later than August
31, 2020, petitioners must submit a final alternative staging plan
correcting any deficiencies. Petitioners also should provide the
necessary corrections to the governments of Canada and Mexico. If the
producer does not correct deficiencies by August 31, 2020, then USTR
may deny the petition.
E. Summary of Petitions to Congressional Subcommittees
Before making a final determination, USTR will provide to the
appropriate congressional committees a summary of the requests to use
an alternative staging regime. These summaries will exclude any
information for which petitioners have requested business confidential
treatment.
F. Public List of Approved Producers
USTR will maintain a public list of the names of vehicle producers
it has authorized to use the alternative staging regime. If USTR
subsequently determines that a producer has failed to meet the
requirements of its alternative staging regime, USTR may remove the
name of the producer from this list and it no longer will be eligible
to claim preferential treatment under its previously approved
alternative staging regime.
G. Approval by Canada and Mexico
An authorization by USTR to use an alternative staging regime will
apply only to the producer's eligibility to use the regime for imports
into the United States. A vehicle producer will need to provide a
similar petition to Canada or Mexico under its respective procedures,
in order to have the petition approved by each of the three Parties to
the USMCA.
V. Alternative Staging Regime Review and Modification
A. Request for Modification of Plans
A vehicle producer must notify USTR and the Committee as soon as
practicable through the address provided above, of any material changes
to the information contained in the petition that will affect the
producer's ability to meet any of the requirements set for in Articles
2 through 7 of the Automotive Appendix after the alternative staging
period has expired. A vehicle producer may submit to USTR and the
Committee a request for modification of its plan with respect to such
changes.
B. Information Required in Modification Request
A vehicle producer's modification request should provide a list of
the material changes to the information contained in the petition,
including any supplemental information relating to the petition, and
any material changes to circumstances that will affect the producer's
ability to meet any of the requirements set for in Articles 2 through 7
of the Automotive Appendix after the alternative staging period has
expired. The modification request also must include a statement by the
producer recommitting to its intention to meet the requirements during
and after expiration of the alternative staging regime period as
outlined in Section III.
C. Approval Process of Modification
No later than 90 days after receiving the modification request,
USTR, in consultation with the Committee, will make a determination,
based on the modified plan whether the producer still is able to meet
the requirements set forth in Articles 2 through 7 of the Automotive
Appendix after the alternative staging period has expired. USTR will
provide its determinations to the petitioner in writing. If USTR denies
the modification request, the vehicle producer may request the reasons
for the denial.
D. Inability To Meet Requirements for Use of the Alternative Staging
Regime
If USTR, in consultation with the Committee, determines that the
information provided by the vehicle producer in the modified plan will
no longer be able to meet the requirements set forth in the Automotive
Appendix, USTR will notify the vehicle producer in writing, and no
claim for preferential treatment may be made, on or after the date of
the determination, with respect to covered vehicles of the producer
pursuant to the alternative staging regime. A producer may continue to
make a claim of preferential tariff treatment pursuant to the
requirements set forth in the Automotive Appendix.
VI. Failure To Meet Requirements for Use of the Alternative Staging
Regime
An importer may not make a claim for preferential treatment with
respect to a covered vehicle of a producer pursuant to an alternative
staging regime, if USTR, in consultation with the Committee, makes a
determination that:
a. The producer has failed to take the steps outlined in its
request under Section III and, as a result, no longer will be able to
meet the requirements set forth in the Automotive Appendix after the
alternative staging regime has expired.
b. The producer has provided false or misleading information in its
request under Section III.
c. If a vehicle producer is authorized to use the alternative
staging regime for more than ten percent of its total production of
passenger vehicles or light trucks in USMCA countries, the producer has
failed to notify USTR of material changes to circumstances that will
prevent the producer from meeting any of the requirements set forth in
the Automotive Appendix after the alternative staging regime has
expired.
USTR will provide its determinations to the producer in writing and
provide the producer with a reasonable opportunity to respond to the
determination.
VII. Producers of Heavy Trucks or Other Vehicles
For the period ending seven years after entry into force of the
Agreement, if a producer certifies an LVC for a heavy truck that is
higher than 45 percent by increasing the amount of high-wage material
and manufacturing expenditures above 30 percentage points, the producer
may use the points above 30 percentage points as a credit towards the
RVC percentages under Article 4.1 of the Automotive Appendix, provided
that the RVC percentage is not
[[Page 22244]]
below 60 percent. A producer of heavy trucks also may request the
alternative staging regime per the requirements set out in Section II.
A producer should contact USTR through the address provided above as
soon as possible and well in advance of the submission due date if it
intends to submit such a request.
Daniel Watson,
Acting Assistant U.S. Trade Representative for the Western Hemisphere,
Office of the United States Trade Representative.
[FR Doc. 2020-08405 Filed 4-20-20; 8:45 am]
BILLING CODE 3290-F0-P
