Mara Lee

The director of Global Trade Watch and the AFL-CIO point person on trade are calling on supporters to talk to their members of Congress now, to ask them to pledge not to vote for the new NAFTA until changes are made to labor standards and provisions extending exclusivity for brand-name medicines. Lori Wallach, of Global Trade Watch, said of the original NAFTA, "This kind of corporate power grab branded as a free trade agreement [is] what birthed the fair trade movement."

The World Trade Organization's Dispute Settlement Body is establishing panels to review seven countries' complaints about Section 232 tariffs on steel and aluminum, as well as panels on Chinese, Canadian, Mexican and European retaliatory tariffs in response to those tariffs. The countries that requested a WTO verdict about the U.S. action include China, Canada, Mexico, Norway, Russia, Turkey and the European Union. All said that the tariffs, claimed as necessary to protect national security, are really safeguards, but the U.S. did not follow safeguard rules. The retaliatory tariffs, aimed to mirror the cost of the tariffs, are illegal, the U.S. argues. Countries hit by safeguard tariffs can raise tariffs in response, but only after a WTO panel says they can.

By the time NAFTA's replacement agreement is signed Nov. 30, Mexican Ambassador Geronimo Gutierrez said, his "expectation is that we will have ... a solution to the tariffs on steel and aluminum, or at least a very clear track that gives certainty to all parties involved that a solution is coming," he said at a Nov. 20 Brookings Institution event on U.S.-Mexico relations. "We are working heavily on that in the next nine days."

Congress has been fairly passive on tariffs so far, Sen. Doug Jones acknowledged at a field hearing in his home state of Alabama, but, the Democrat said, "hopefully, as we go into a new Congress we will see some more activity." Jones, who heard from farmers, steel consumers, the Port of Mobile, auto manufacturers and steel mills during his hearing Nov. 19, said he believes that several administrations "have been fast and loose with this national security measure," referring to Section 232. The measure was used as the basis to hike tariffs on steel and aluminum, and could be used for similar actions on imported uranium, auto parts and autos. Jones noted the bill led by Sen. Rob Portman, R-Ohio -- Jones is a co-sponsor (see 1808010048) -- that would give Congress the opportunity to veto future Section 232 tariffs.

President Donald Trump suggested the trade conflict with China may not continue to escalate, saying repeatedly that China wants a deal. "And I think a deal will be made," he told reporters at the White House on Nov. 16. "We'll find out very soon." Trump said that China "sent a list of things that they’re willing to do, which was a large list, and it’s just not acceptable to me yet. There were four or five big things left off. I think we’ll probably get them, too. But it’s -- as you know, it’s a very complete list. I think it’s 142 items, and that’s a lot of items."

Express shippers are troubled by a footnote that suggests the U.S. could lower its de minimis rate for NAFTA partners (see 1811060010) and ask that it be removed, said Michael Mullen, executive director of the Express Association of America, during a Nov. 15 U.S. International Trade Commission hearing. Mullen also said the fact that the taxes and duties levels are separate means the $40 Canadian and $50 for Mexico will be the operative de minimis amounts. That Canadian level "is among the lowest in the world," Mullen said, adding that Mexico already offers simplified duties and taxes above $50 and $117, so the administration needs to make sure the pact does not make things worse.

The U.S. International Trade Commission, hosting lobbyists on the new NAFTA for a second day Nov. 16, tried to sort out whose perspective was most germane on the trade pact's impact, as producers and customers, manufacturers and importers and even producers and producers disagreed about the policy impact of what the U.S. trade representative did -- or didn't do -- in the negotiations.

When an agriculture shipment is held up at the border, the U.S.-Mexico-Canada Agreement says a country must let the shipper know what the problem is within five calendar days. That's better than the deadline under the Trans-Pacific Partnership. Randy Gordon, CEO of the North American Export Grain Association, pointed to that as an example of the reduction in non-tariff barriers that the new pact would bring that would help agriculture interests. He also praised the ways the pact addresses sanitary and phytosanitary standards, and said the countries should be able to resolve conflicts more quickly as a result.

Determining how the U.S.-Mexico-Canada Agreement will change the economics of auto and auto parts manufacturing in America is critical for the U.S. International Trade Commission, which is responsible for estimating the economic effects of the pact. Of all the exports from the U.S. to its NAFTA partners -- $419 billion in 2015 -- $67 billion is automotive, according to the Center for Automotive Research. In the most recent data, the U.S. imported more than $58 billion in new vehicles from Mexico and Canada through the first eight months of 2018, and exported more than $18 billion new vehicles to those countries, according to the International Trade Administration.

Two House Democrats said NAFTA led to outsourcing to Mexico, and that they would not support a rewritten version of the trade deal unless it eliminates the incentives for outsourcing jobs by U.S. companies. Rep. Bill Pascrell, D-N.J., ranking member of the House Ways and Means Trade Subcommittee, said "the jury is still out as to whether this deal meets my standard for a better deal for American workers."