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, 22238-22244 [2020-08405]

Download as PDF lotter on DSKBCFDHB2PROD with NOTICES 22238 Federal Register / Vol. 85, No. 77 / Tuesday, April 21, 2020 / Notices and management of truck ingress/egress, borrow site selection to optimize use of borrow sites that do not require truck use of common roadway segments, potential alternate routing during local rail operations on Rivergate Road, and installation of temporary signals at key intersections. • To avoid potential for indirect impacts to the interior least tern, TVA would implement specific conservation measures identified as per consultation with USFWS under Section 7 of the ESA. • Should the osprey nest located north of the East Ash Pond Complex on a mooring cell structure in McKellar Lake be active during ash impoundment closure, activities would be minimized within a 660-foot diameter buffer around the nest during the osprey nesting season. These avoidance measures would result in no adverse impacts to these birds. • TVA may elect to remove the osprey nest during the non-nesting season in conjunction with other ongoing site decommissioning activities unrelated to ash impoundment closure. As such, TVA would ensure nest removal would follow guidance from the U.S. Department of Agriculture, Animal and Plant Health Inspection Service, Wildlife Services Program. • TVA will require that CCR be disposed of in a previously developed and/or permitted site having sufficient permitted capacity. • Borrow would be obtained from one or more previously developed and/or permitted commercial borrow site(s) within 30 miles of ALF. No specific site has been identified at this time and ultimate site selection would be determined by the contractor. However, TVA would perform all necessary due diligence and consultation as required under Section 106 of the National Historic Preservation Act (NHPA) related to any offsite work. • TVA will continue to collect groundwater samples from existing monitoring wells and review the analytical results as a part of the 2015 TDEC administrative order process, the EPA’s CCR Rule, and other regulatory requirements. TVA is also implementing the IRAs and corrective measures to control and begin treating impacted groundwater identified in some shallow aquifer monitoring wells around the East Ash Pond Complex. • A TDEC Section 401 Water Quality Certification/TDEC Aquatic Resource Alteration Permit and U.S. Army Corps of Engineers 404 permit would be required for disturbance to wetlands and stream features, and the terms and conditions of these permits would VerDate Sep<11>2014 21:19 Apr 20, 2020 Jkt 250001 include mitigation for unavoidable adverse impacts, as appropriate. • A National Pollutant Discharge Elimination System (NPDES) General Permit for Storm Water Discharges Associated with Construction Activities or an Individual Construction Storm Water permit may be required for the proposed project, and a Storm Water Pollution Prevention Plan (SWPPP) would be required to detail sediment and erosion control BMPs. • Several actions associated with the proposed closures were addressed in TVA’s programmatic consultation with the USFWS on routine actions and federally-listed bats in accordance with ESA Section 7(a)(2) which was completed in April 2018. For those activities with potential to affect Indiana bats and northern long-eared bat, TVA committed to implementing specific conservation measures. These activities and associated conservation measures would be implemented as part of the proposed project. • To minimize adverse impacts on natural and beneficial floodplain values, BMPs would be used during construction activities. In addition, TVA would obtain documentation from permitted landfill(s) receiving ash that the ash would be disposed in an area outside the 100-year floodplain. BMPs employed to minimize impacts include: • Fugitive dust emissions from site preparation and construction would be controlled by wet suppression, installation of a truck washing station and other BMPs, as appropriate. In addition, the Clean Air Act Title V operating permit incorporates fugitive dust management conditions. • Erosion and sedimentation control BMPs (e.g., silt fences) would ensure that surface waters are protected from construction impacts. • Consistent with E.O. 13112 as amended by E.O. 13751, disturbed areas would be revegetated with native or non-native, non-invasive plant species to avoid the introduction or spread of invasive species. • BMPs as described in the projectspecific SWPPP and the Tennessee Erosion and Sediment Control Handbook-4th Edition, 2012 would be used during construction activities to minimize impacts and restore areas disturbed during construction. • TVA may decide to contract with outside vendors for construction and/or transportation services under Alternative B. It is TVA policy that all contractors have in place a site-specific health and safety plan prior to operation on TVA properties. PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 Dated: April 14, 2020. Robert M. Deacy, Sr., Senior Vice President, Generation Construction, Projects & Services, Tennessee Valley Authority. [FR Doc. 2020–08420 Filed 4–20–20; 8:45 am] BILLING CODE 8120–08–P 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 Office of the United States Trade Representative. ACTION: Request for petitions. AGENCY: 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 USMCAAutosCommittee@ustr.eop.gov. 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: SUMMARY: 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 E:\FR\FM\21APN1.SGM 21APN1 Federal Register / Vol. 85, No. 77 / Tuesday, April 21, 2020 / Notices lotter on DSKBCFDHB2PROD with NOTICES 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/freetrade-agreements/united-states-mexicocanada-agreement/us-automotivesector. 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 VerDate Sep<11>2014 21:19 Apr 20, 2020 Jkt 250001 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 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 22239 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 E:\FR\FM\21APN1.SGM 21APN1 22240 Federal Register / Vol. 85, No. 77 / Tuesday, April 21, 2020 / Notices 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 highwage technology expenditures, and no more than 5 percentage points of highwage 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. lotter on DSKBCFDHB2PROD with NOTICES 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. VerDate Sep<11>2014 21:19 Apr 20, 2020 Jkt 250001 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. PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 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 E:\FR\FM\21APN1.SGM 21APN1 Federal Register / Vol. 85, No. 77 / Tuesday, April 21, 2020 / Notices 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. lotter on DSKBCFDHB2PROD with NOTICES 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 VerDate Sep<11>2014 21:19 Apr 20, 2020 Jkt 250001 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, PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 22241 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 midcycle vehicle updates. b. Date (month and year) of the start of each current vehicle model’s production. c. Date (month and year) of the midcycle 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 E:\FR\FM\21APN1.SGM 21APN1 22242 Federal Register / Vol. 85, No. 77 / Tuesday, April 21, 2020 / Notices 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. lotter on DSKBCFDHB2PROD with NOTICES 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 VerDate Sep<11>2014 21:19 Apr 20, 2020 Jkt 250001 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, PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 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 E:\FR\FM\21APN1.SGM 21APN1 Federal Register / Vol. 85, No. 77 / Tuesday, April 21, 2020 / Notices 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’’. G. Approval by Canada and Mexico 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. A. Request for Modification of Plans 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. lotter on DSKBCFDHB2PROD with NOTICES 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. VerDate Sep<11>2014 21:19 Apr 20, 2020 Jkt 250001 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 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. PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 22243 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 E:\FR\FM\21APN1.SGM 21APN1 22244 Federal Register / Vol. 85, No. 77 / Tuesday, April 21, 2020 / Notices 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 DEPARTMENT OF TRANSPORTATION Federal Aviation Administration [Docket No. FAA–2020–0385] Agency Information Collection Activities: Requests for Comments; Clearance of a Renewed Approval of Information Collection: Competition Plans, Passenger Facility Charges Federal Aviation Administration (FAA), DOT. ACTION: Notice and request for comments. AGENCY: In accordance with the Paperwork Reduction Act of 1995, the FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. SUMMARY: Written comments should be submitted by June 22, 2020. ADDRESSES: Please send written comments: By Electronic Docket: www.regulations.gov (Enter docket number into search field). By mail: Rachel McCoy, Office of Airport Planning and Programming, Federal Aviation Administration, 800 Independence Ave. SW, Suite 620, Washington, DC 20591. By fax: 202–267–5302. FOR FURTHER INFORMATION CONTACT: For further information please contact Amanda Shotto by email at: amanda.j.shotto@faa.gov; phone: 202– 267–8744 SUPPLEMENTARY INFORMATION: The FAA, in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the FAA assess the impact of its information collection lotter on DSKBCFDHB2PROD with NOTICES DATES: VerDate Sep<11>2014 21:19 Apr 20, 2020 Jkt 250001 requirements and minimize the public’s reporting burden. The FAA invites comment on any aspect of this information collection, including (a) Whether the proposed collection of information is necessary for the FAA’s performance; (b) the accuracy of the estimated burden; (c) ways for the FAA to enhance the quality, utility and clarity of the information collection; and (d) ways that the burden could be minimized without reducing the quality of the collected information. The agency will summarize and/or include your comments in the request for OMB’s clearance of this information collection. OMB Control Number: 2120–0661. Title: Competition Plans, Passenger Facility Charges. Form Numbers: There are no FAA forms associated with this collection. Type of Review: Renewal of an information collection. Background: The DOT/FAA will use any information submitted in response to this requirement to carry out the intent of Title 49, Sections 40117(k) and 47106(f). These rules assure that a covered airport has, and implements, a plan that provides opportunities for competitive access by new entrant air carriers or air carriers seeking to expand. The affected public includes public agencies controlling medium or large hub airports. Respondents: 5 affected airports annually. Frequency: On occasion. Estimated Average Burden per Response: Approximately 150 hours. Estimated Total Annual Burden: Approximately 750 annually. Issued in Washington, DC, on April 15, 2020. David F. Cushing, Manager, Airports Financial Assistance Division, APP–500. [FR Doc. 2020–08363 Filed 4–20–20; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration [Docket No. FMCSA–2019–0255] Agency Information Collection Activities; Renewal of an Approved Information Collection: Training Certification for Drivers of Longer Combination Vehicles Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Notice; request for comments. AGENCY: PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 In accordance with the Paperwork Reduction Act of 1995, FMCSA announces its plan to submit the Information Collection Request (ICR) described below to the Office of Management and Budget (OMB) for approval and invites public comment. FMCSA requests approval to renew the ICR titled ‘‘Training Certification for Drivers of Longer Combination Vehicles (LCVs),’’ OMB Control No. 2126–0026. This ICR relates to Agency requirements for drivers to be certified to operate LCVs, and associated reporting and recordkeeping requirements that motor carriers must satisfy before permitting their drivers to operate LCVs. Motor carriers, upon inquiry by authorized Federal, State or local officials, must produce an LCV Driver-Training Certificate for each of their LCV drivers. DATES: Please send your comments by May 21, 2020. OMB must receive your comments by this date in order to act on the ICR. ADDRESSES: Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to www.reginfo.gov/public/do/ PRAMain. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function. FOR FURTHER INFORMATION CONTACT: Ms. Pearlie Robinson, Driver and Carrier Operations Division, DOT, FMCSA, West Building 6th Floor, 1200 New Jersey Avenue SE, Washington, DC 20590. Telephone: 202–366–4325. Email: MCPSD@dot.gov. SUPPLEMENTARY INFORMATION: Title: Training Certification for Drivers of LCVs. OMB Control Number: 2126–0026. Type of Request: Renewal and correction of a currently-approved information collection. Respondents: LCV training providers who train new LCV drivers; drivers who complete LCV training each year; current LCV drivers who submit their LCV Driver-Training Certificate to prospective employers; and employers (motor carriers) receiving and maintaining copies of the LCV DriverTraining certificates of their drivers. Estimated Number of Respondents: 50,708, consisting of 218 LCV training providers, plus 218 newly-certified LCV drivers, plus 25,027 currently-certified LCV drivers seeking new employment, plus 25,245 motor carriers hiring certified and newly-certified LCV drivers seeking new employment. Estimated Time per Response: 10 minutes for training providers to SUMMARY: E:\FR\FM\21APN1.SGM 21APN1

Agencies

[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