Enforceability, Remaining Section 232 Tariffs Among Main Complaints About USMCA Signing
Complaints about weak enforceability of the new U.S.-Mexico-Canada Agreement were found among both trade advocates and free-trade skeptics as they reacted to the signing of the pact Nov. 30 in Argentina. Customs and trade facilitation elements were praised by many interest groups, but the failure to get higher de minimis levels from Canadian and Mexican negotiators was a disappointment, several said. And the fact that steel and aluminum tariffs on Canada and Mexico remain troubles many, with the Global Automakers saying "it is unfathomable that this important issue has not been resolved in the context of these negotiations."
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The Business Roundtable, the National Foreign Trade Council and the National Retail Federation all pointed to the metal tariffs on North American goods as something that should have already ended. "The Administration has repeatedly stated that these tariffs would be removed upon conclusion of the USMCA and we are very disappointed that the agreement is being signed with no resolution of this issue," the NFTC said. "These tariffs have been devastating for U.S. companies -- they continue to raise U.S. production costs and will limit the benefits of the agreement, especially for U.S. manufacturers of autos, heavy machinery, energy and food products. These tariffs have also led to retaliatory measures, largely targeting U.S. food and agricultural producers, therefore canceling the benefits that many U.S. agricultural producers would otherwise enjoy from the new agreement."
On customs, the NFTC said: "while we are pleased to see that the informal entry provisions that the U.S. sought were obtained, we are very disappointed in the outcome regarding de minimis levels. The Administration and Congress should ensure that the current U.S. de minimis level of $800 is maintained and that USTR continues to seek ambitious outcomes on de minimis in future agreements. In addition, USTR should ensure that Mexico and Canada do not lower current customs standards to make it more difficult to trade cross-border as they implement the agreement."
The Express Association of America also said it opposes any move to lower the domestic de minimis level. The higher levels in Mexico and Canada are "a good first step toward Canada and Mexico raising their de minimis to more meaningful commercial levels in the future," it said. The group also hailed the delivery services annex, and said it hopes it will be replicated in future free trade agreements.
On the trade-skeptic side, Lori Wallach, head of nonprofit Global Trade Watch, issued a statement that said, "The NAFTA 2.0 text that is being signed contains some improvements that progressives have long demanded, some damaging terms we have long opposed and some important unfinished business. ... As is, the agreement falls short of the changes needed to stop NAFTA’s ongoing job outsourcing, downward pressure on our wages and attacks on environmental safeguards, but there is a path to improving it so a final NAFTA package could win wide support." One of the improvements Wallach is heralding -- the scaling back of investor-state dispute settlement -- is one of the changes many business groups dislike, as they see it as making it more difficult to invest in Mexico.
The U.S. Council for International Business is one of those protesting that change. "In addition, we note other changes in areas such as government procurement and de minimis that fall short in providing U.S. business the best framework for growth," it said. But the NRF emphasized that even though there are changes that anger both sides, members of Congress should not let the perfect be the enemy of the good. "While there may be disagreements over details, it is critical that Congress approves this agreement in 2019," the NRF said.