Senate Finance Committee members praised the experience of Doug McKalip, the administration's nominee to be chief agricultural negotiator in the Office of the U.S. Trade Representative. McKalip, a senior adviser on international trade policy and other matters to the agriculture secretary, is a career staffer at USDA.
A controversial electric vehicle purchase tax credit (see 2203010064) that was limited to cars and trucks assembled in U.S. plants by union workers has been changed to a tax credit that says the vehicle has to have final assembly in North America. Purchases of new clean vehicles (they can include fuel cells, not just EVs) are eligible for a $7,500 tax credit for buyers whose joint income is below $300,000 or an individual taxpayer with a modified adjusted gross income of $150,000 or less.
U.S. Trade Representative Katherine Tai asked for consultations with Mexico over a 2021 amendment to Mexico's Electric Power Industry Law that privileges the state-owned electric utility, and over 2019 and June 2022 actions that privilege PEMEX, Mexico's state-owned oil and gas company.
Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, said USMCA is crucial to the country's economic recovery from the pandemic "because it was developed with the future in mind."
The Office of the U.S. Trade Representative said that as a result of a labor rights complaint under USMCA, a Panasonic plant's management reimbursed workers for dues it had deducted for a union contract that workers did not choose, and negotiated a contract with an independent union that would provide a "significant wage increase."
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Mexico's Undersecretary for Foreign Trade Luz Maria de la Mora said that Mexico is working to complete the goals of the trade facilitation chapter in USMCA, so that with transparency and information sharing, even small businesses can access expedited release. De la Mora, who spoke in Spanish during a press conference in Vancouver, Canada, also attended by U.S. Trade Representative Katherine Tai and Canada's trade minister. She said that all three countries have the goal of secure borders, but also borders that allow businesses to be competitive.
Ahead of a meeting of the top trade officials of Canada, Mexico and the U.S., business groups from all three countries said each country is taking "steps that have undermined or risk undermining the benefits negotiated through enactment of the USMCA." The Business Roundtable, the Business Council of Canada and the Consejo Mexicano de Negocios did not specify what actions they find troubling. They did say that governments and business interests should work together since "[b]usinesses, workers, farmers, and families are navigating many challenges and risks, including rising costs due to inflation, supply chain disruptions, and labor shortages."
Canada, which had exported more than $133 million worth of solar panels in 2017 before its exports were hit with the global safeguard, will no longer be subject to the 14.75% tariff on panels. The change was announced July 7, while U.S. Trade Representative Katherine Tai was visiting Canada for the USMCA Free Trade Commission; the memorandum of understanding marking the change will be signed July 8. Tai said the agreement "contains a mechanism to ensure that solar product imports from Canada do not undermine the existing U.S. safeguard measure on imports of solar products," and also commits Canada to prohibiting the import of solar module components made in whole or in part with forced or compulsory labor.
The North American auto industry is waiting with baited breath for the panel decision on the interpretation of the auto rules of origin, and for the additional guidance from CBP to the auto industry, according to Dan Ujczo, a USMCA maven with clients in the auto industry. Ujczo, a senior counsel at Thompson Hine, said in a July 6 phone interview that one of the areas where importers need clarity is in how steel in vehicles can be certified as North American before the melted and poured standard arrives in 2027.