On Wednesday, January 29, President Trump held the long-awaited United States-Mexico-Canada Free Trade Agreement signing ceremony. This comes after a year’s worth of negotiations in Congress following a deal being reached by the three nations in December 2018.
Majorities in both chambers voted for the agreement, with a 385-41 vote in the House and an 89-10 vote in the Senate. The RV industry had been calling for the ratification of USMCA and applauds news of a deal. Free and fair trade is critical to Americans nationwide and has been a boon for American manufacturing, including the RV industry.
The American RV industry benefits from strong trade relations with Canada and Mexico and the USMCA will ensure that the special trading relationship between our countries continues. The United States is the world’s largest producer of RVs, producing twice as many RVs as the rest of the world combined. Over 90 percent of those exports go to Canada - more than 50,000 RVs in 2017 and 33,000 in 2018. In Canada, 99 percent of RVs retailed are made in the United States. Mexico, while behind Canada, is also a top recipient country for RV shipments with 2 percent.
Importantly, USMCA maintains current rules of origin for RVs. While the new agreement increases the domestic content requirements for motor vehicles, the rules of origin will not change for RVs. Motorhomes will remain at 62.5 percent domestic content and travel trailers at 50 percent domestic content for duty-free treatment - the same as under current North American Free Trade Agreement rules.
USMCA will also encourage reducing technical barriers to trade between the three countries and promote regulatory coherence. Rather than burdening industry and business with duplicative, contradictory, or confusing standards and regulations, the agreement creates an inter-governmental coordinating body to promote cross border regulatory best practices. Critically, USMCA includes a process for mutual accreditation/recognition of technical regulations. Streamlining regulations and encouraging mutual recognition of standards will allow the RV industry to better compete within Canadian and Mexican markets.
The agreement has already been approved in Mexico, and awaits ratification in Canada, which began the process this week.