The Office of the U.S. Trade Representative will push for codifying prohibition of tariffs on e-commerce and for raising Mexico’s and Canada’s de minimis levels, USTR Robert Lighthizer told senators June 21. Canada has a de minimis threshold of $15 and Mexico has a $50 level, while the U.S. has an $800 de minimis level. “There are real differences in the three countries between the de minimis levels, and … the United States has what is clearly the most modern, the most enlightened” threshold, Lighthizer said during a Senate Finance Committee hearing exploring the Trump administration’s trade policy and USTR’s fiscal year 2018 budget request. “And that is something that I’m sure that we will pursue, and I hope that we would end up with a good result in this area.” Lighthizer added that the new NAFTA should add a digital trade chapter.
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Duty deferral provisions within NAFTA should be left out of any updated deal, the National Customs Brokers & Forwarders Association of America said in comments to the U.S. trade representative (here). Under NAFTA, some products processed in the U.S. "require a special deferral entry to be filed with duty payment to CBP" when exported to Canada or Mexico, the group said. "This special entry and duty payment would not apply if the same shipment were exported to any other country outside of NAFTA" and therefore "hinder U.S. exports to Mexico and Canada," the group said. The NCBFAA comments were in response to a USTR request for public input on how it should update NAFTA.
NAFTA negotiators should embrace trade facilitation and “do no harm” to existing cross-border relationships as they rework the agreement, trade associations said in comments to the U.S. Trade Representative (here). USTR on June 13 extended the deadline for comment submission on the expected NAFTA renegotiation from June 12 until 11:59 p.m. on June 14, citing "high interest" and a need to ensure all interested participants have an opportunity to comment. USTR requested input on potential modifications to the agreement following the administration’s formal notification to Congress that it intends to start renegotiating the agreement as early as mid-August (see 1705220007 and 1705180043).
Upcoming NAFTA renegotiations should result in the prohibition of customs duties on digital transmissions, Canadian and Mexican de minimis levels consistent with the U.S. threshold, and a ban on burdensome customs procedures, the Internet Association said in an outline of priorities for the expected trilateral discussions (here). NAFTA should ensure governments can’t add extra charges to the flow of music, video, software, e-books and games across borders, the association said. World Trade Organization members have agreed to a temporary moratorium on such duties, which some countries have threatened to apply, the association said. With regard to de minimis, the “artificially low” levels of Mexico and Canada disproportionately impact internet-enabled U.S. businesses that regularly ship low-value items, especially small companies, the group said. NAFTA should bring Canada’s and Mexico’s thresholds up to the U.S. $800 level, the association said.
Textile and apparel associations are readying a push for more structure in the short-supply process and the allowance of material cumulation from other free trade agreements within NAFTA, industry executives said in recent interviews. Although the Trump administration's interest in changes in NAFTA’s Textile and Apparel Chapter may be minimal, there might be some room during renegotiation to modify the agreement’s short supply list criteria and deadlines, U.S. Fashion Industry Association (USFIA) President Julia Hughes said in an interview. “There essentially have been no additions to the short supply list since NAFTA's implementation,” as all three member governments must approve any addition to the list, an American Apparel and Footwear Association (AAFA) spokesman said in an email. NAFTA allows non-North American-originated fabrics on its short supply list to qualify for preferential treatment if cut and sewn in one or more NAFTA territories. The list comprises fabrics not produced in commercial quantities in the U.S.
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The Agricultural Marketing Service is proposing to continue its 15 million board feet de minimis threshold under the softwood lumber information order, it said (here). As provided in the 2011 final rule creating the softwood lumber order (see 11080216), importers that import less than 15 million board feet of softwood lumber are exempt from assessments, as long as they apply annually for a certificate of exemption and provide documentation to support their request. A federal court in 2016 struck down the 15 million board foot threshold, finding the number arbitrary, but left the softwood lumber regulations in place while AMS reconsiders. AMS is now proposing to keep the same threshold, but providing further analysis. Comments are due July 31.
SCOTTSDALE, Arizona -- The increase in the de minimis value threshold last year seems already to be driving a shift in international trade patterns, said Brenda Smith, executive assistant commissioner for the CBP Office of Trade, during a May 25 interview at the West Coast Trade Symposium. "What we're seeing is significant changes in supply chains," reflected in the growing number of Section 321 entries, she said. For example, one port in Alabama with few CBP officers "is suddenly getting this flood because it's close to a distribution center," she said. Likely, that's a result of container-loads full of under $800 small packages that qualify for de minimis, she said.
SCOTTSDALE, Arizona -- CBP is looking at a wide range of options for meeting the goals of the March executive order (see 1704030033) meant to resolve issues of unpaid antidumping and countervailing duties, said Troy Riley, executive director-Commercial Targeting and Enforcement in the CBP Office of Trade. Riley, who is leading implementation of the executive order, discussed several things being considered, including suspending importer of record numbers that haven't been used in years and new bonding schemes, during a panel on May 24 at the West Coast Trade Symposium. Brenda Smith, executive assistant commissioner for the CBP Office of Trade, alluded to the likelihood of additional orders along the same lines. "My guess is we have not seen the end of" trade-focused executive orders, said Smith, who moderated the panel.