Meat and livestock trade between the U.S. and Canada could be improved through better alignment of food safety and other import requirements, the North American Meat Institute (NAMI) and the Canadian Meat Council (CMC) said in recent comments to the Office of Information and Regulatory Affairs. OIRA is under the Office of Management and Budget. The comments were submitted in response to a request for input from the U.S.-Canada Regulatory Cooperation Council (see 1810120028). The U.S.-Mexico-Canada Agreement text "provides opportunity for further regulatory cooperation that can work to bring about development of common approaches to food safety, building upon the work of the RCC," the groups said.
USMCA
The U.S.-Mexico-Canada agreement is a free trade agreement between the three countries, also known as CUSMA in Canada and T-MEC in Mexico. Replacing the North American Free Trade Agreement (NAFTA) in 2020, the agreement contains a unique sunset provision where, after six years (in 2026), any of the three parties may decide not to continue the agreement in its current form and begin a period of up to 10 years where USMCA provisions may be renegotiated.
The U.S. International Trade Commission, hosting lobbyists on the new NAFTA for a second day Nov. 16, tried to sort out whose perspective was most germane on the trade pact's impact, as producers and customers, manufacturers and importers and even producers and producers disagreed about the policy impact of what the U.S. trade representative did -- or didn't do -- in the negotiations.
Express shippers are troubled by a footnote that suggests the U.S. could lower its de minimis rate for NAFTA partners (see 1811060010) and ask that it be removed, said Michael Mullen, executive director of the Express Association of America, during a Nov. 15 U.S. International Trade Commission hearing. Mullen also said the fact that the taxes and duties levels are separate means the $40 Canadian and $50 for Mexico will be the operative de minimis amounts. That Canadian level "is among the lowest in the world," Mullen said, adding that Mexico already offers simplified duties and taxes above $50 and $117, so the administration needs to make sure the pact does not make things worse.
When an agriculture shipment is held up at the border, the U.S.-Mexico-Canada Agreement says a country must let the shipper know what the problem is within five calendar days. That's better than the deadline under the Trans-Pacific Partnership. Randy Gordon, CEO of the North American Export Grain Association, pointed to that as an example of the reduction in non-tariff barriers that the new pact would bring that would help agriculture interests. He also praised the ways the pact addresses sanitary and phytosanitary standards, and said the countries should be able to resolve conflicts more quickly as a result.
Two House Democrats said NAFTA led to outsourcing to Mexico, and that they would not support a rewritten version of the trade deal unless it eliminates the incentives for outsourcing jobs by U.S. companies. Rep. Bill Pascrell, D-N.J., ranking member of the House Ways and Means Trade Subcommittee, said "the jury is still out as to whether this deal meets my standard for a better deal for American workers."
Determining how the U.S.-Mexico-Canada Agreement will change the economics of auto and auto parts manufacturing in America is critical for the U.S. International Trade Commission, which is responsible for estimating the economic effects of the pact. Of all the exports from the U.S. to its NAFTA partners -- $419 billion in 2015 -- $67 billion is automotive, according to the Center for Automotive Research. In the most recent data, the U.S. imported more than $58 billion in new vehicles from Mexico and Canada through the first eight months of 2018, and exported more than $18 billion new vehicles to those countries, according to the International Trade Administration.
Americans and Canadians are talking about ending U.S. tariffs on Canadian steel and aluminum and the Canadian countermeasures that followed, but Canadian Deputy Ambassador to the U.S. Kirsten Hillman said much remains uncertain. "Whether or not that will come to a successful conclusion before the signing is something I cannot predict," said Hillman, a veteran trade negotiator sent to Washington specifically for the NAFTA renegotiation. She couldn't say how the resolution would come about, and if some kind of cap on Canadian exports of those metals would be part of it.
International Trade Today is providing readers with some of the top stories for Nov. 5-9 in case they were missed.
While the next chairman of the House Ways and Means Committee is clear -- Rep. Richard Neal, D-Mass. -- the leadership of the Senate Finance Committee and the Ways and Means Trade Subcommittee is up in the air. Neal, who represents a slice of Western Massachusetts that has suffered from deindustrialization, voted against NAFTA, but for giving China permanent most favored nation status. He also voted no on the most recent fast-track renewal in 2015.
The de minimis footnote within the U.S.-Mexico-Canada Agreement is cause for "serious concerns" for the Customs Matters and Trade Facilitation Industry Trade Advisory Committee (ITAC 12), the committee said in an addendum to its report on the trade deal. The addendum, which is dated Oct. 24 but was released by the Office of the U.S. Trade Representative this week, is among multiple reports updated after Canada agreed to join the deal between the U.S. and Mexico. While the main advisory committee offered some light criticism in its support of the deal (see 1811060023), individual ITACs included some more pointed concerns.