The Treasury Department published its spring 2023 regulatory agenda for CBP. There are no mentions of any new trade-related rulemakings, though the agency did move two rules off its agenda to a lower-priority list of planned long-term actions. One of the rules would finalize in the customs regulations the increase of the de minimis level from $200 to $800 under the Trade Facilitation and Trade Enforcement Act of 2015. The other would amend CBP's regulations on disclosure of information regarding merchandise bearing suspected counterfeit trademarks by creating "a procedure for the disclosure of information otherwise protected by the Trade Secrets Act to a trademark owner when merchandise bearing suspected counterfeit trademarks has been voluntarily abandoned."
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.
Canada and Mexico talked about the panel ruling on auto rules of origin -- a decision that went their way but that the U.S. has chosen not to implement -- and Canada brought up the issue with U.S. Trade Representative Katherine Tai as well, according to readouts from Mexico and Canada about the bilateral meetings July 6 ahead of the official Free Trade Commission meeting in Cancun, Mexico.
Sixteen trade groups, including the U.S. Chamber of Commerce, the National Association of Manufacturers, PhRMA and BIO, asked U.S. Trade Representative Katherine Tai to press Mexico to comply with its USMCA commitments during her trip to Mexico for the Free Trade Commission meeting.
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U.S. Trade Representative Katherine Tai and Deputy USTR Jayme White headed to Cancun, Mexico, to meet with Mexican Economy Secretary Raquel Buenrostro and Canada's trade minister, Mary Ng, ahead of the official USMCA Free Trade Commission meeting on July 6.
The change from NAFTA to USMCA rules of origin, and in particular an increased regional value content threshold, increased sourcing of auto parts from Canada and Mexico by U.S. automakers as well as parts production in those two countries, the International Trade Commission said in a report released June 30. But the new agreement’s labor value content rules increased labor costs, causing production to relocate to the U.S. and Canada, the report said.
The Labor Council of the USMCA discussed several topics, including "key labor policies on violence and discrimination in the workplace," as well as "cooperation and technical assistance projects," and "implementation of the USMCA’s provision related to imports produced with forced labor," at a meeting June 28-29 in Mexico City. The meeting included government representatives who oversee labor issues from all three member countries. The council also discussed "the USMCA’s Labor Chapter implementation and conferred on further opportunities to collaborate on labor priorities as a North America Region," the joint statement from the meeting said. This was the Labor Council's second meeting, after the first took place in June 29, 2021 (see 2106300043).
Electro-mechanical actuators used in automotive applications don't meet the “parts” exception to the NAFTA tariff shift rule because the parts at issue are provided for is a separate subheading, CBP said in a recent ruling.
The U.S. faces the challenge of "convincing ourselves that it's worth getting back into the game" of negotiating trade agreements that lower tariffs, rather than convincing other countries to do the same, former Ohio Sen. Rob Portman said during a June 28 webinar. "Without the U.S. leading, it's difficult to see expansions of trade," he said, adding that the U.S. is currently seen as uninterested in promoting trade through reducing tariffs.
Three automakers are changing their blanket coverage period for USMCA documentation, the Automotive Industry Action Group said in an emailed alert. Ford, GM and Honda had been issuing blanket documentation that covered the period July 1 to June 30 each year, as a result of the USMCA’s July 1, 2020, effective date. The three automakers will now switch to blanket periods that run for the calendar year, from Jan. 1 to Dec. 31, the AIAG said. The change will “better align with other trade agreements” and “make it easier for suppliers to manage their trade documentation processes,” the AIAG said. The change will take effect for GM and Honda Jan. 1, 2024, and for Ford Jan. 1, 2025, the AIAG said.