Auto part manufacturers must pay high-wages to qualify for U.S.-Mexico-Canada agreement

(AP Photo/Keith Srakocic, File)
(AP Photo/Keith Srakocic, File)(WIBW)
Published: Jun. 29, 2020 at 12:53 PM CDT
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TOPEKA, Kan. (WIBW) - The U.S. Department of Labor announced an interim final rule providing regulations necessary to implement the United States-Mexico-Canada trade agreement and treaty.

The U.S. Department of Labor says it has released an interim final rule which provides regulations necessary to implement and administer the high-wage components of the Labor Value Content requirements set in the USMCA and the treaty’s implementing statute.

The DOL says the LVC requirements promote high-wage jobs for U.S. automobile and auto parts industry by requiring manufacturers to produce a significant portion of certain motor vehicles using high-wage labor to qualify for the tariff claims under the treaty.

The treaty requires a passenger vehicle, light truck or heavy truck to be eligible for preferential tariff treatment, a minimum percentage of the cost of the vehicle must be made at a facility that pays at least $16 an hour.

“Through the USMCA, the United States is establishing more balanced, reciprocal trade that supports high-paying jobs for Americans and grows the North American economy,” said Secretary of Labor Eugene Scalia. “The USMCA recognizes that international trade, investment and economic growth are promoted through the protection and enforcement of labor rights and the improvement of working conditions. This is a significant win for the workforce in the American auto industry, and helps level the playing field for U.S. manufacturers.”

The DOL says to qualify for the tariff, a producer must file a certification with U.S. Customs and Border Protection which shows its production of covered vehicles meets the high-wage components of the LVC requirements.

“The Wage and Hour Division is proud to support this new law through our role in the certification and verification process,” says Wage and Hour Division Administrator Cheryl Stanton. “The interim final rule we published today ensures that manufacturers and other stakeholders understand the specific requirements and procedures for claiming preferential tariff treatment, and it provides transparency into the process.”

The rule, according to the DOL, will go into effect July 1, 2020, and is available for review and public comment for 60 days. The Department says it encourages those interested to submit comments.

The rule and procedures for submitting comments can be found at the Wage and Hour Division’s interim final rule website.

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