Announcement on Informed Compliance for USMCA by June 1, CBP Says

The Office of the U.S. Trade Representative is disinclined to offer an informed compliance period for most importers, “because most of the rules of origin have remained essentially the same” as what was in NAFTA, so CBP can honor the U.S.-Mexico-Canada Agreement claims with the same information that backed NAFTA claims, according to Brenda Smith, executive assistant commissioner of CBP’s Office of Trade.

Smith, who was speaking on a conference call with reporters May 11, said the government does recognize there has been a substantial amount of change for the auto industry. “We are working now with the United States Trade Representative to structure that transition period, so more to come on that.”

She said the announcement would come no later than June 1, which is also when the uniform regulations are expected to be issued. However, she said, they would like to inform the auto industry “in the fairly near future.... We are very sensitive to the fact the more predictability that we can give the industry, the more valuable that sort of flexible transition approach is.”

Textiles also have changes to the rules of origin under USMCA. “On the textiles, we are still trying to get the best sense of the nature of the impact on them,” Smith said. “My understanding is many of the textile rules, they don’t take effect on July 1 itself, they had a built-in transition period, but we are assessing that now.”

Even though it's only 51 days from the date of entry into force, and there are details that are yet to be ironed out, Smith was clear that the July 1 date would not be delayed.

When asked by International Trade Today if the final implementing instructions would be available by June 1, Smith said, “the bulk of the implementing instructions were issued on April 21. And any changes that we make will be relatively minor, however, we are working now with the trade community to make sure we've identified any gaps, and can address those.” She said CBP's target for a final update on the implementing instructions is June 15.

The way that auto companies will be audited for regional steel and aluminum content is not yet decided, Smith said. Compliance advisers to that industry want to know whether it will be the nameplate companies' purchases of the metals that count, or whether major suppliers, such as engine manufacturers, can have their steel use rolled up into that number (see 2004090049). “We are still in discussion [on] exactly what that means and how it will flow through,” she said.