Employees from the global trade management software company GTKonnect will join EY member firms in the U.S. and India, the companies said in a news release. “The transaction is part of EY global trade management services expansion,” EY said. Terms of the deal weren't released. “Global trade is undergoing a seismic change as tariff wars, protectionism, regulatory uncertainty and now a pandemic, disrupt established business models and trade relationships,” said Kate Barton, EY global vice chair - tax. “Organizations are struggling to respond and find it increasingly difficult to address their supply chain ecosystems, focus on operational costs and, ultimately, define their medium-to-long-term strategies. We are excited to further expand EY global trade managed service offerings through this strategic transaction.”

A Mexican federal official, along with Mexican and U.S. attorneys, believe that Mexican firms will have to sharply change their labor relations policies, but they aren't as sure about how often labor issues will be brought up, in the context of the U.S.-Mexico-Canada Agreement. If the U.S. government doesn't agree that a Mexican company has come into compliance with Mexican labor laws, it could lead to goods from that producer being barred from USMCA tariff benefits.

Even as COVID-19 delays some advances in trade facilitation -- such as being able to use a single window to export into Canada -- the U.S.-Mexico-Canada Agreement has good news for it, panelists said during a Dickinson Wright webinar May 28.

While some are saying the disruption of COVID-19 is going to convince businesses to turn away from just-in-time approaches (see 2005190050), the chief economist at Flexport thinks those predictions are overblown. “Resiliency is a great thing if you can achieve it. The question is, at what cost,” Phil Levy said. Just-in-time inventory management “came from cost pressures. Businesses were facing cost pressures. I don’t think those pressures are going to abate.”

Even as UPS officials warned traders that the date of entry into force for the U.S.-Mexico-Canada Agreement will not be postponed because of the COVID-19 pandemic responses, they said all the details needed to comply won't be ready by July 1. Penny Naas, senior vice president for international public affairs at UPS, said it's not just the auto rules of origin that are “going to be provisional” in USMCA. She said that government officials will still be working on some other areas after it goes into effect. The global shipping company is in close contact with the Office of the U.S. Trade Representative.

The complexity of the auto rules of origin in both NAFTA and the U.S.-Mexico-Canada Agreement are the result of what one observer calls the "political preoccupation" with retaining domestic auto manufacturing. Eric Miller, president of Rideau Potomac Strategy Group, noted that in NAFTA, that resulted in the tracing list, and in USMCA, that resulted in the labor value content and higher North American value targets, including for specific parts.

Countries should be coordinating how drugs will be distributed once they are proven to work, drug industry representatives say. Senior officials at the trade group for biologic drugs and the trade group for generics, along with the head of Pfizer's global trade policy, were speaking on a Washington International Trade Association webinar May 14 about the global supply chain for pharmaceuticals and the search for a COVID-19 cure.

Incentives are strong for China and the U.S. to retain the phase one trade deal, an economist at S&P Global wrote May 14, in a report called “U.S. and China Kick Trade Deal Can Down The Road.” While the report's author said it's possible the Trump administration would hike tariffs on China to punish that country for COVID-19, “we have long thought that, from an economic perspective, technology not trade is the core issue in the U.S.-China relationship. Technology has been and will continue to be the key driver of growth in China. It is at the heart of intellectual property, market access, and level playing field debates.” Chief Economist Shaun Roche said the two countries are on a path toward technological decoupling, no matter how the purchases shake out that are promised in the phase one deal.

Dockworkers' strikes, hurricanes and the trade war have all been major problems for importers and exporters at various points in the last 20 years, but the impact of COVID-19 dwarfs them all, panelists and listeners said on a webinar during the National Association of Foreign-Trade Zones virtual conference May 13.

Trade groups that have been active in pushing for different intellectual property approaches in India have formed a new coalition called the Alliance for Trade Enforcement, they announced May 13. Brian Pomper, a former Senate Finance Committee chief trade counsel, is the AFTE executive director. The group includes manufacturing trade groups, pharmaceutical interests, software and telecom interests, and the National Foreign Trade Council and U.S. Council for International Business. They noted that the Special 301 Report recently released by the Office of the U.S. Trade Representative identified 33 countries that don't adequately protect IP rights, and said “many of those countries are repeat offenders.” Pomper said AFTE will work with the administration and Congress to dismantle trade barriers such as high tariffs, complex and opaque taxes targeting imports, and laws that do not give intellectual property the protection that USTR says is proper.