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COAC Recommends Delay for USMCA Entry Into Force

CBP, the Office of the U.S. Trade Representative and the U.S.-Mexico-Canada Agreement partners “should delay USMCA’s entry into force until no earlier than January 1, 2021,” the Commercial Customs Operations Advisory Committee (COAC) said in a recommendation during its April 15 meeting. “Now is not the time to implement a trade agreement that contains so many important and meaningful changes that will impact certain industries in a significant financial manner,” it said. “The trade simply is not, and will not be, ready to shift from NAFTA to USMCA on June 1, 2020.”

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There's been growing pressure on the administration to push the timeline back, and CBP said it would be ready for USMCA implementation whether on June 1 or another date (see 2004150066). John Leonard, CBP executive director-trade policy and programs, responded to the recommendation by saying that any such timing change would be announced by the USTR. The COAC also recommended a “transition or implementation period for the year where NAFTA qualifying goods with appropriate certificates of origin will be considered to comply under the USMCA.”

Absent a delayed implementation, “at the very least, CBP and its USMCA partners should grant enforcement discretion by way of an informed compliance period until the trade has had reasonable time to implement each administration’s regulatory and automation requirements,” the COAC said.

Meanwhile, CBP last month created a USMCA Center to oversee the agency's implementation of the agreement, the COAC said in an issue paper. “This group will ensure that all the moving parts are coordinated and communicated, both internally and to our interagency and private sector partners.” The agency plans to use multiple methods to roll out “compliance guidance and training opportunities for both our employees and the trade community,” it said.

The document also mentioned some plans for new USMCA rules of origin for autos, “which include a phase-in of higher regional value content (RVC) requirements, as well as wage requirements for producers of autos and the components used in them.” CBP will use Regulatory Audit and Agency Advisory Services “in verifying USMCA claims on autos, as it did under NAFTA,” it said. CBP is also “working with the U.S. Department of Labor (which will be responsible for the wage verifications) to determine how wage verifications will be performed, and to ensure Labor has access to the necessary data,” it said. “CBP is also preparing to bring Labor into the Border Interagency Executive Council and negotiate ... [a memorandum of understanding] following passage of USMCA.”