Mara Lee

After a visit at the White House, House Ways and Means Chairman Kevin Brady, R-Texas, told reporters at the Capitol that he told the president that the next step after tax reform is expanding export opportunities. "NAFTA was a good part of our discussions," he said Feb. 26. "I think there's potential major wins for President [Donald] Trump in NAFTA." Brady pointed to improvements in customs, digital trade, intellectual property and agriculture.

The Japanese Business Federation (Keidanren) and the United States Council for International Business wrote to U.S. governors suggesting that foreign-owned U.S. auto and auto parts factories could be endangered if the U.S. trade representative insists on "economically unsustainable" rules of origin for automobiles. "As of 2015, Japanese companies had invested a cumulative $421 billion in the U.S., supporting more than 856,000 jobs in communities throughout the U.S. with average salaries of more than $80,000," the Feb. 21 letter said. The two groups say it's time to update NAFTA to deal with digital trade and intellectual property rights, but that they wish "to emphasize the need to 'do no harm'" in the rewrite.

The Department of Defense agrees with a Section 232 investigation that concludes that systematic unfair trade practices that erode the industrial base pose a risk to national security. However, Defense Secretary James Mattis' position is that any tariffs or quotas aimed at shoring up the domestic steel and aluminum industries may have "negative impact on our key allies." Mattis, in an undated memo released by the Commerce Department on Feb. 22, wrote that there is no immediate problem with sourcing steel and aluminum for military uses, since military consumption is just 3 percent of U.S. production. The Commerce Department's report, which became public last week (see 1802160020), noted that as well.

Courier and delivery services could greatly benefit from a modernized NAFTA, the Coalition of Services Industries said in a report released Feb. 21. The lobbying group said negotiations are in a critical stage, and if the U.S. withdraws from the agreement -- as President Donald Trump has repeatedly threatened -- services industries are among the groups that will be hurt most. The services coalition said NAFTA could change rules on cross-border trucking and Mexico's requirements to use Mexican brokers.

All of the Democrats on the House Ways and Means Committee, except ranking member Richard Neal of Massachusetts, signed a Feb. 22 letter asking the chairman of the Trade Subcommittee to hold a hearing on NAFTA. The group says a hearing is necessary so that Congress can provide appropriate oversight of the U.S. trade representative's negotiations for a revised NAFTA. "More than 25 years ago, this Committee held the administrations negotiating the original NAFTA to a high standard of accountability, requiring United States Trade Representatives, Secretaries of Labor, and Administrators of the Environmental Protection Agency to appear before it multiple times," the lawmakers said. "American workers, businesses, and other stakeholders of today deserve as much accountability, if not more, from their negotiators and from their representatives."

With less than a week before the seventh round of NAFTA talks begin, top Mexican officials are talking about working with the country's auto industry to shape a proposal on auto rules of origin. The Office of the U.S. Trade Representative has suggested that vehicles contain 85 percent North American content to qualify as duty free, and that half of the content come from the United States (see 1712120022). Detroit automakers have said that would be massively disruptive and make cars more expensive.

Steel industry interests testified Feb. 16 that duty evasion is pervasive, and that customs enforcement cannot keep up. "Customs and duty evasion and circumvention occurs because there's opportunity and because there's lack of enforcement," said Scott Paul, president of the Alliance for American Manufacturing. "Our border protections with regards to fairly traded goods are underfunded."

Worldwide tariffs on steel and aluminum or worldwide quotas on imports of those metals are two of the Commerce Department’s three recommendations on how to respond to plant closures and job losses in the domestic steel and aluminum industries. A flood of steel and aluminum, dumped at prices that undermine U.S. producers, is threatening the industrial base, and therefore national security, Commerce Secretary Wilbur Ross told the White House in January. On Feb. 16, he shared the details of those reports with reporters on a conference call, and posted redacted versions of both reports on the department’s website.

The Trump administration floated a reduction to the Harbor Maintenance Tax in its recently released budget proposals. The administration called for collecting $300 million less per year in HMT because more money has been collected than is spent on harbor upkeep in recent years. The budget proposal says that if the lower level of harbor maintenance tax is collected, it "would provide greater flexibility for individual ports to establish appropriate fee structures for services they provide, in order to help finance their capital and operating expenses on their own."

A bill that would retroactively renew the Generalized System of Preferences, and extend the program for developing countries until the end of 2020, passed the House of Representatives Feb. 13 by a nearly unanimous vote -- 400-2 in favor. A companion bill has not yet been introduced in the Senate.