CBP Guidance Needed by Auto Industry on 'Urgent' RVC Calculation Issues, COAC's Feldman Says

CBP's interpretation of the “core or super-core calculation” within USMCA will have a major impact on the auto industry, with billions of dollars “at stake,” Sandler Travis lawyer Lenny Feldman said at the March 17 meeting of the Commercial Customs Operations Advisory Committee. That calculation involves the regional value content, and CBP's stance differs from Canada's and Mexico's, he said. “Prior to July 1, there are some really urgent issues, particularly in the auto industry, that need to be addressed,” said Feldman, a COAC co-chair.

The other USMCA members understand the provisions to say that once the 75% RVC for super-core parts is met, “they roll up into your parts and into your other subassemblies,” Feldman said. CBP's position is that the RVC must be recalculated, “so that product does not give you, so to speak, that 100% originating credit, but you still have to go up and do the RVC again, contrary to what all the other parties believe is the case,” he said.

The COAC Rapid Response Subcommittee is reviewing an addendum to the USMCA implementing instructions issued in January as the July 1 end of “restrained enforcement” for automotive goods approaches, said Kathy Wilkins, vice president of Alliance Operating Services. CBP told the COAC it expects to complete the “final uniform regulations package” by that July 1 date as planned (see 2006300066), she said. “The rules of origin continues to be a source of disruption for many industries as well as the lack of a clear understanding and application of regional content value,” Wilkins said.

“We really hope that a lot of the uncertainty that the trade has will be answered when the regulations are published by July 1, but we will continue to work with all stakeholders on any and all issues to do with the USMCA,” said John Leonard, CBP executive director-trade policy and programs.

CBP and its USMCA center should also make sure to help on the export side, COAC member Kate Weiner, director of North America customs at Cargill, said. “We currently have been having to work with the Canadian and Mexican governments for assistance for export-related inquiries, and we would really like to see the center step up a little bit more on that aspect,” she said.