USMCA Auto Teamwork Wanting - GAO

A performance audit of coordination of the implementation, enforcement, and verification of the new automotive rules of origin included in the USMCA found gaps in accountability, placing responsibility on the office of the United Stated Trade Representative (USTR).

Ambassador Katherine Tai issued a statement that "The GAO’s report provides an overwhelmingly positive assessment of the USTR-led interagency coordination efforts on USMCA autos-related issues."

In 2020, the United States-Mexico-Canada Agreement changed rules for the largest trade category among the partners—automobiles. The agreement, which sets import rules on where materials and labor for autos and parts come from, is expected to raise U.S. automotive prices but also support job growth.

The USTR chairs an interagency committee responsible for providing advice and input on implementing, enforcing, and modifying the rules. But it doesn't have written guidance on how to track progress or facilitate communication among committee members, according to the report.

Interagency Autos Committee generally followed six of the eight leading collaboration practices, as identified in GAO’s prior work. However, the committee partially followed two other practices. For example, the committee had not developed written guidance to help ensure accountability.

Clearly articulated written guidance could improve communication, limit uncertainty for agencies and stakeholders, and aid in the monitoring of progress toward committee outcomes.

CBP and DOL have generally followed all eight of the leading collaboration practices during their implementation of the LVC certification process and planning for LVC verifications. Their LVC guidance details the agencies’ roles and responsibilities, as well as other leading collaboration practices, for these two processes.

In addition, GAO found that no significant interagency coordination takes place for enforcement of the new rules of origin, because CBP alone conducts those activities. According to officials, CBP has not yet enforced some of the requirements because the final set of rules of origin regulations are awaiting approval.

GAO recommends writing guidance to improve accountability and collaboration.

The USTR Statement noted that public input already received as well as at the upcoming February 7, 2024 public hearing, will be taken into consideration as USTR and the interagency draft  the 2024 USMCA Autos Report to Congress.

[Full GAO Report]