The United Automobile Workers union would like to see vehicles left out of trade negotiations entirely when Japan and the U.S. sit down to craft a free-trade deal. Josh Nassar, UAW legislative director, told the International Trade Commission that Japan has no tariffs on imported cars, yet its imports are just 7 percent of sales. From all countries, Japan imported 11.1 billion in vehicles in 2017, according to World's Top Exports. In 2017, the Commerce Department said the U.S. imported $51 billion in Japanese-built vehicles. The ITC also heard from the milk lobby, the American Chemistry Council and the American Apparel and Footwear Association during its hearing Dec. 6.
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.
Leaders in Congress's trade committees on both sides of the aisle didn't seem appreciative of President Donald Trump's latest threat to withdraw the U.S. from NAFTA before its replacement is voted on. Trump, speaking to reporters on Air Force One on Dec. 2, said: "I will be formally terminating NAFTA shortly. And so Congress will have a choice of the USMCA or pre-NAFTA, which worked very well." Larry Kudlow, the president's top economic adviser, told reporters on a conference call Dec. 3 that the president said that because "he's trying to light a fire under Congress."
Complaints about weak enforceability of the new U.S.-Mexico-Canada Agreement were found among both trade advocates and free-trade skeptics as they reacted to the signing of the pact Nov. 30 in Argentina. Customs and trade facilitation elements were praised by many interest groups, but the failure to get higher de minimis levels from Canadian and Mexican negotiators was a disappointment, several said. And the fact that steel and aluminum tariffs on Canada and Mexico remain troubles many, with the Global Automakers saying "it is unfathomable that this important issue has not been resolved in the context of these negotiations."
Canadian Prime Minister Justin Trudeau said the new NAFTA "lifts the risk of serious economic uncertainty," and President Donald Trump said he doesn't "expect to have very much of a problem" getting the deal through Congress, because it's been "so well reviewed." While most Democrats in the House of Representatives are not rejecting Trump's NAFTA rewrite out of hand, none who publicly responded to the Nov. 30 signing rushed to endorse it, either. It must go through a few more steps before it is approved.
Trade groups called for improvements to Japanese customs procedures as part of any U.S.-Japan Free Trade Agreement, including enhanced cooperation between CBP and Japan Customs to combat fraud, in comments submitted to the Office of the U.S. Trade Representative on negotiating objectives for the potential trade deal. Commenters generally supported an increase in the Japanese de minimis level, but as was the case in prior trade agreement negotiations, disagreed on rules of origin, particularly for textiles.
Significant changes to rules of origin for steel products are coming, should the U.S.-Mexico-Canada Agreement be ratified and take effect as scheduled in 2020, the American Institute for International Steel said in a Nov. 20 blog post. As currently drafted, those rules would become more restrictive for North American steel products of several headings in Chapter 73, with fewer allowable tariff shifts and new regional value content requirements.
Ten Republican senators, led by avid free-trader Pat Toomey of Pennsylvania, wrote to the White House Nov. 20 recommending a lame-duck session vote on the U.S.-Mexico-Canada Agreement. "We are concerned that if the Administration waits until next year to send to Congress a draft implementing bill, passage of the USMCA as negotiated will become significantly more difficult," they wrote. They said that fast track requires a 30-day waiting period between the final legal text's submission and a draft implementing bill's submission, but said that final legal text could be sent before the signing.
The director of Global Trade Watch and the AFL-CIO point person on trade are calling on supporters to talk to their members of Congress now, to ask them to pledge not to vote for the new NAFTA until changes are made to labor standards and provisions extending exclusivity for brand-name medicines. Lori Wallach, of Global Trade Watch, said of the original NAFTA, "This kind of corporate power grab branded as a free trade agreement [is] what birthed the fair trade movement."
International Trade Today is providing readers with some of the top stories for Nov. 13-16 in case they were missed.
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.