A coalition of unions and nonprofits, including Public Citizen, sent a letter June 26 to the director of Mexico's Human Rights Commission, asking her to intervene in the detention of Mexican labor lawyer Susana Prieto Terrazas. “Ms. Prieto’s detention is casting a pall over the proposed July 1, 2020 start of the revised North American Free Trade Agreement,” they said, and noted that the U.S. trade representative, when he was asked about it during congressional testimony, called the arrest a “bad indicator” of Mexican intentions to comply with tougher labor standards.
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.
Keeping customs brokers updated with the details of U.S.-Mexico-Canada Agreement compliance is critical to helping smaller importers transition away from NAFTA, said Brenda Smith, executive assistant commissioner of CBP’s Office of Trade. Smith was interviewed on a June 25 podcast hosted by the Center for Strategic and International Studies about the USMCA, which enters into force July 1.
The Office of Information and Regulatory Affairs completed its review of the interim final rule from the Department of Labor on certification under the U.S.-Mexico-Canada Agreement. The review was completed on June 24, it said. The labor value content, as it is known, is needed for both cars and light trucks to meet the new auto rules of origin under the USMCA. For cars, starting July 1, 33% of the vehicle must come from workers making at least $16 an hour in the U.S., $20.91 in Canada, or 304.21 pesos in Mexico, if the company is not granted alternative staging. If it is granted alternative staging, the threshold is 25%.
The Office of the U.S. Trade Representative ought not to announce 10% tariffs on Canadian aluminum at the end of this week, just before the U.S.-Mexico-Canada Agreement goes into force, Ways and Means Chairman Richard Neal, D-Mass., told International Trade Today in an interview. The administration has not announced its intentions, but several outlets quoted unnamed sources saying the tariffs are coming if Canada doesn't agree to voluntary restrictions on its exports.
The labor provisions of the U.S.-Mexico-Canada Agreement on free trade “don’t only apply to U.S. companies doing business in Mexico,” regulatory law expert Ignacio Sanchez, with DLA Piper, told a webinar held June 24 to prepare clients for the treaty that takes effect July 1. USMCA also applies to “any facility producing goods in Mexico” for import into the U.S., he said.
International Trade Today is providing readers with some of the top stories for June15-19 in case they were missed.
CBP issued an updated ACE deployment schedule that includes several additions related to the U.S.-Mexico-Canada Agreement. A USMCA tariff schedule database and other updates will be deployed July 1, the date the deal enters into force, CBP said in the change log. In August, CBP will deploy reconciliation changes to prevent merchandise processing fee refunds. That deployment is likely necessary because the USMCA legislation didn't specifically allow for MPF refunds. The Office of the U.S. Trade Representative is working with Congress for a legislative fix, though CBP recommends delaying reconciliation filings if possible until the MPF issue is figured out (see 2006160046).
Everett Eissenstat, senior vice president of global public policy at General Motors, told the Center for Strategic and International Studies that the stricter rules of origin in the U.S.-Mexico-Canada Agreement won't “change the whole dynamic” of siting decisions but will be taken into consideration.
The Commercial Customs Operations Advisory Committee (COAC) for CBP will next meet July 15, remotely, beginning at 1 p.m., CBP said in a notice. Comments are due in writing by July 14.
U.S. Trade Representative Robert Lighthizer told two senators concerned about retaliatory tariffs in India that the U.S. is working on restoring India to the Generalized System of Preferences benefits program, but that it's slow going. “We’re in the process of restoring it if we can get an adequate counterbalancing proposal from them,” he told Sen. Maria Cantwell, D-Wash., who had complained that American apples are now taxed at 70% in India because of Section 232 tariffs on metals from that country.