CBP issued the following releases on commercial trade and related matters:
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 International Trade Commission posted Revision 1 to the 2023 Harmonized Tariff Schedule. The update includes a technical correction to the USMCA rules of origin and a minor correction for organic surface-active agents (other than soap). The update also implements the extension through May of exclusions from Section 301 tariffs for 81 medical care products related to COVID-19 (see 2302020065) and implements corrections to descriptions and tariff numbers of two other Section 301 exclusions (see 2302090027). Also, the update removes Western Sahara from country designations and codes in the statistical annexes.
The muted response of the agriculture secretary to Mexico's concessions on genetically modified corn was not enough, according to Rep. Jason Smith, R-Mo., chairman of the House Ways and Means Committee. Smith sent a letter Feb. 15 to USDA Secretary Tom Vilsack and U.S. Trade Representative Katherine Tai arguing that it is time to initiate a formal dispute over the non-tariff-barriers.
The top Republican on the Senate Finance Committee said renewing the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill didn't happen last year because Democrats pushed "social policy and environmental policy in MTB and GSP."
Washington state-based auto broker BidBuy Auctions settled a customs fraud case with DOJ, agreeing to pay $430,000, the U.S. Attorney's Office for the Western District of Washington announced. The qui tam case saw a former BidBuy employee allege the auto broker lied to CBP about the value of imported vehicles to pay less in duties. As a result of the settlement, the former employee-turned-whistleblower will get 23%, or $98,900, of the $430,000 payment.
A group of Texas members of the House of Representatives wrote to officials at the Office of the U.S. Trade Representative and USDA lauding their “forceful stand” against Mexican attempts to ban imports of genetically modified corn, and urging them to file a USMCA dispute if an agreement with Mexico is not reached.
The U.S. requested a second dispute panel over Canada's dairy tariff-rate-quota measures, and under USMCA, that panel will automatically be formed. The U.S. says Canada's revisions to its TRQs after it lost a case "impose new conditions effectively prohibiting retailers, food service operators, and other types of importers from utilizing TRQ allocations. Through these measures, Canada undermines the market access it agreed to provide in the USMCA."
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While CBP rulings on country of origin show there are ways to keep China in the supply chain and still avoid Section 301 tariffs, Thompson Hine attorneys, during a webinar on what to expect in trade in 2023, said that if your product is auto parts, electric vehicle battery components, chemicals, pharmaceuticals or critical minerals, your chance of avoiding tariffs or other regulatory restrictions is not great.
After getting public pressure from House Democrats on labor practices at Manufacturas VU, a Michigan-headquartered supplier of interior automotive trims, the Office of the U.S. Trade Representative has opened a second rapid response request with Mexico about what's happening at the plant in Piedras Negras.