Trade Advisory Committee Unanimously Supports USMCA; Labor Committee Neither Endorses Nor Rejects

The main advisory committee for the Office of the U.S. Trade Representative unanimously supports the U.S.-Mexico-Canada Agreement as "far better than the existing NAFTA," and encouraged Congress to enact it as quickly as possible. The committee includes three union leaders, and the rest of its 21 members are either from right of center think tanks or business interests.

The committee report, filed Oct. 25 with USTR, highlighted agricultural gains with Canada, as well as a little-noted increase in Canadian tariff preference level allowances for Made in USA garments. "Given that this TPL was regularly filling, the status quo has been actively acting as a disincentive for “Made in USA” apparel for one of its top markets. The change should go a considerable way to alleviating that constraint," the Advisory Committee on Trade Policy and Negotiations said. The committee also praised the increase in de minimis in Canada and Mexico. "Members ... would have liked these to be higher and welcome continued efforts by the Administration to achieve higher thresholds. We urge the Administration not to contemplate lowering its own de minimis threshold."

While the union members on the ACTPN praised the labor chapter as an enforcement gain, the USTR's Labor Advisory Committee said it does not believe the labor chapter can stem the tide of outsourcing to Mexico unless Mexico passes and implements the labor laws described in the chapter. The LAC said it is reserving judgment on the new NAFTA.

"We reiterate that while there are positive provisions in the renegotiated NAFTA, there are also provisions in the agreement which undermine the interests of workers and consumers," the LAC wrote Oct 25. With regard to the revised auto rules of origin, the committee complained that core parts for electric vehicles are not enumerated, and that there are no core parts rules for heavy trucks. It also said that the $16/hour quota is unlikely to shift companies' location decisions for auto manufacturing. Its language was virtually identical to the AFL-CIO's pre-hearing brief (see 1811010017), noting that the $16 is an average, not a minimum. It also is not tied to inflation.

"Overall, while it appears that the auto rules of origin could cause some production shifts to the United States, those production shifts could be offset in other places. For example, a vehicle manufactured in Hermosillo may add more U.S. content to meet the standard, but that content could easily be offset by a U.S. produced vehicle including more Mexican content than it does currently," the report says. But the committee said the new rules of origin are an improvement on the current rules.

The ACTPN, which is led by Leo Girard, who represents steelworkers in both Canada and the U.S., said Canada and Mexico should not continue to face steel and aluminum tariffs. "This can only improve the prospects for our already highly integrated auto supply chain," the committee said.

The LAC praised the limitations on investor-state dispute settlement, but said, "we continue to object to Annex 14-E as a whole. There is no need to undermine our democracy by including private justice for foreign investors in the new NAFTA."