International Trade Today is providing readers with some of the top stories for June 17-21 in case they were missed.
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.
Trade groups that are lobbying House members to ratify the new NAFTA say they are trying to talk through concerns, and the National Association of Manufacturers' representative said she's seeing positive momentum.
The day after the House working group had its first meeting to hammer out changes to the U.S.-Mexico-Canada Agreement, the renegotiated NAFTA, Rep. Jan Schakowsky, D-Ill., Rep. Rosa DeLauro, D-Conn., a freshman Democrat from a swing district, one Republican and 12 other Democrats introduced a bill that seeks to shorten the biologics exclusivity period in U.S. law to five years. The new NAFTA requires Mexico to raise its exclusivity period from five to 10 years, and Canada to raise its period from eight to 10 years. Current U.S. law is 12 years.
President Donald Trump, with Canadian Prime Minister Justin Trudeau by his side, expressed optimism that the House of Representatives would approve the new NAFTA, and also implied that there will be no more national security tariffs levied on either neighbor. He said Mexico's president has "substantially slowed down" migration across Mexican territory. "It's already had a big impact," he said.
Even on the U.S.-Mexico border, Congress members were not hearing much alarm from constituents when President Donald Trump was threatening to levy tariffs on all Mexican imports because he was unhappy with the volume of Central American migration. "They don't necessarily understand how that was going to impact them," said Rep. Will Hurd, R-Texas. He'd tell them: "This is going to impact jobs, like Toyota in San Antonio."
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, who's been working for months on a compromise bill to address national security tariffs, said that an introduction won't happen until after the August recess. "We're trying to get a consensus on [Section] 232s, that isn't the easiest thing," he said. "But we're making some progress." He said, speaking to reporters on June 19, that he'd had meetings on the bill that day.
The Mexican Senate voted to ratify the U.S.-Mexico-Canada Agreement on June 19, positioning Mexico to become first of the three countries to approve the renegotiated NAFTA. There have been some initial movements toward consideration of the deal by the U.S. Congress, and Canada is seen as likely following the U.S.'s lead before its legislature gets fully engaged (see 1906110040).
For weeks, Republicans in the House have been complaining that House Speaker Nancy Pelosi isn't moving fast enough to bring a vote to the floor on the U.S.-Mexico-Canada Agreement. "USMCA is being held hostage by career politicians in Washington who are hell-bent on preventing President Trump from getting a win. A delay in approval of this agreement will hit the wallets of family farms in Illinois and across the country. The agriculture community is losing out because political gamesmanship is being placed in front of their interests," Rep. Darin LaHood, R-Ill., wrote in an op-ed published June 18 in the Washington Examiner.
A bipartisan group of 23 lawmakers from Arizona, California and Texas objected to the possible inclusion of "seasonality" provisions within the implementing legislation for the U.S.-Mexico-Canada Agreement in a June 14 letter to U.S. Trade Representative Robert Lighthizer. "Seasonality, whereby certain agricultural products could be subjected to numerous seasonal and regional dumping duties at various times throughout the year, runs counter to the spirit of a free trade agreement intended to tear down both tariffs and non-tariff barriers to trade," the lawmakers said. "Using USMCA as a vehicle for pursuing seasonal agriculture trade remedies risks pitting different regions of the country against each other."
The U.S. Chamber of Commerce expects the U.S.-Mexico-Canada Agreement to pass before Congress’ August recess, two Chamber of Commerce officials said, saying Democrats’ issues with the bill are “bridgeable.” “We do think that we can see USMCA move forward before the August break,” said John Murphy, the Chamber’s senior vice president for international policy. “We want to get on with it. We need the certainty that USMCA will provide.”