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TPP Auto ROO Most Likely To Hurt Makers Of Less Complex Parts: Experts

TPP Auto ROO Most Likely To Hurt Makers Of Less Complex Parts: Experts

Inside U.S. Trade’s World Trade Online

The automotive rules of origin in the Trans-Pacific Partnership (TPP) are most likely to hurt auto parts suppliers that are furthest removed from the finished vehicle or producers of materials that are less complex, easily shipped and face low-cost competition from Asia, according to industry, congressional and academic experts. This is because the TPP auto rules of origin give North American producers closer to the finished vehicle the flexibility to buy a majority of their materials from low-cost suppliers in non-TPP countries such as China and still qualify for tariff benefits under the agreement, these experts said.  That could prompt these companies to source more of these less complex inputs from non-TPP countries instead of buying them from U.S. producers. Some experts cited steel and tires as examples of cost-sensitive and relatively non-complex inputs whose producers in the U.S. would likely be hurt by the lower TPP regional value content thresholds.

 
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