Canadian and Mexican politicians are sending different messages to their countries' journalists about how quickly the uniform regulations can be completed for the new NAFTA, now known as the U.S.-Mexico-Canada Agreement. A Canadian politician and a labor leader told a Canadian newspaper that a June 1 date of entry into force is unlikely, given how much remains to be done to be ready, and especially with the disruption caused by the coronavirus COVID-19 pandemic.
The Commercial Customs Operations Advisory Committee (COAC) for CBP will next meet April 15, remotely, beginning at 1 p.m., CBP said in a notice. Comments are due in writing by April 14.
CBP should look at “extending the liquidation of all unliquidated entries by 90 or 180 days,” the Business Alliance for Customs Modernization told the agency in a March 23 letter. Those extensions “would help ensure that importers who may be eligible for duty refunds (e.g., based on Section 232 or Section 301 product exclusion approvals) do not miss opportunities to pursue such refunds administratively due to staffing issues caused by COVID-19.” BACM offered its support for deferring collections of customs duties and asked “that payments related to past liabilities, such as denied protests, also be temporarily deferred.” BACM suggested several other items it said “would help ease the burden on the trade community during this time.”
The American Association of Exporters and Importers is asking the Trump administration to help importers and exporters deal with the impact of COVID-19 response measures, whether that impact is a cash crunch, the effects of telework or business decisions made in response to delays in shipments from China. The group is asking the administration to extend the time to respond to regulatory notices that are paper based, including entry filings deadlines, because telecommuting makes it more difficult to manage the paper flow. It is also asking CBP to extend the protest period for customs duties and decisions.
The language of the U.S.-Mexico-Canada Agreement says that in order for the treaty to take effect on June 1 -- as U.S. officials have told Congress they want -- the countries would have to agree that they're ready 12 days from now. Kenneth Smith Ramos, a former top negotiator of the NAFTA rewrite, said the three countries cannot say they've completed their internal procedures by then. “#NotHappening,” he wrote in English at the end of a tweet in Spanish.
Applications to become a panelist on a state-to-state dispute settlement panel for the U.S.-Mexico-Canada Agreement, or on a specialized labor panel, will be due by April 20, the Office of the U.S. Trade Representative said in a notice.
Claims that NAFTA was ripped up or that it was just a rebranding are wrong and paying attention to the changes could mean big savings for businesses, said Dickinson Wright Cross-Border Practice Chair Dan Ujczo during a March 17 Global Chamber webinar. Ujczo said that one polymer and chemicals company he talked to saw that changes from NAFTA to the U.S.-Mexico-Canada Agreement “are going to save us $17 million.” He urged businesses that use NAFTA to convene their purchasing, accounting and either in-house customs teams or customs brokers to investigate their supply chains, because he predicted that CBP will pay closer attention to rules of origin, and he said many companies are relying on slapdash rules of origin certificates from suppliers (see 2002190028).
The auto industry publicly asked the Trump administration not to rush into certifying readiness for the U.S.-Mexico-Canada Agreement's entry into force, given the fact that “a global pandemic is significantly disrupting our supply chains, and the industry is throwing all available resources into managing production through this crisis for our employees and for the broader U.S. economy.”
Canada's House of Commons approved the U.S.-Mexico-Canada Agreement -- called CUSMA in Canada -- by unanimous consent March 13, before adjourning until April 20 due to the coronavirus pandemic. The Canadian Senate passed it less than an hour later. Royal Assent, the equivalent of a presidential signature in the U.S., followed shortly, and the Senate adjourned as well. Now, all three countries must continue to work on uniform regulations so that they can certify the treaty is ready to enter into force. Efforts to slow the spread of the coronavirus disease COVID-19 may slow that process, because the countries also have to evaluate the progress toward fulfilling commitments, such as setting up labor courts in Mexico and getting new rules of origin processes in place. Once that certification is issued, NAFTA will be replaced on the first day of the third month after the announcement.
An update to the Congressional Research Service's report on rules of origin notes that some in the trade community believe that more restrictive rules of origin, such as those that will be part of the NAFTA rewrite for autos, raise compliance costs for traders and may lead companies to avoid using the free trade agreement because the rules are so onerous. Because of those critiques, Congress may want to consider that in future FTAs, the report said.