Corruption, poor logistics and overly strict rules of origin are all barriers to Mexico benefiting from companies' decisions to diversify out of China, a panel of experts from Mexico and the U.S. said. Luis de la Calle, a former Mexican trade official who worked on implementing NAFTA and who represented Mexico at the World Trade Organization, said Mexican leaders have a lack of vision to take advantage of this moment, and he said they are also hobbled by what he called "ideological incompetence."
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.
Eighteen of the 36 Texas representatives in the House and both of Texas's senators asked the new ambassador to Mexico to press Mexico to fulfill its promises on approving agricultural biotech products and to keep Mexico's oil industry open to foreign investors. In an Oct. 19 letter, they wrote: "Texas farmers and ranchers have long benefited from free trade with Mexico and Canada. The USMCA locked in key provisions for agriculture and includes state of the art rules on agricultural biotechnology. Rigorous enforcement of these important priorities is vital for Texas producers. Mexico remains the top destination for U.S. agricultural trade -- ensuring that Mexico abides by these commitments remains a top concern for the producers we represent. We also have raised these concerns directly with United States Trade Representative (USTR) Katherine Tai. Proper implementation of the USMCA is a top priority and the U.S. must engage at all levels of government to ensure that the American people can reap the full benefits from this important trade agreement."
U.S. Trade Representative Katherine Tai and Labor Secretary Marty Walsh held their first meeting with the Labor Advisory Committee for Trade Negotiations and Trade Policy, and, according to a summary provided of the meeting, held "robust discussions" on USMCA implementation, digital trade, and "how China’s non-market policies undermine American workers and domestic sectors. Ambassador Tai reiterated her commitment to re-aligning the U.S.-China bilateral trade relationship in a way that strengthens the American middle class and allows our workers and businesses to compete fairly."
The Commerce Department published notices in the Federal Register Oct. 18 on the following AD/CV duty proceedings (any notices that announce changes to AD/CV duty rates, scope, affected firms or effective dates will be detailed in another ITT article)::
Heavy truck parts destined for a U.S. assembly plant cannot qualify for USMCA benefits under tariff shift rules, CBP told Mitsubishi Electric's Automotive division. Under USMCA, the original equipment starter must have 60% North American content under a net cost method, or 70% under a transaction value method; that percentage will go up in July 2024 to 64% or 74%, respectively, and 70% or 80% in 2027.
The Customs Rulings Online Search System (CROSS) was updated Sept. 24. The following headquarters rulings were modified recently, according to CBP:
Mexico will use the Electronic Certification System (eCERT) for transmitting certificates of eligibility for textile and apparel entries that are eligible for preferential tariff treatment under a tariff preference level, CBP said. The USMCA requires member countries to use "an electronic system for the transmission of a certificate of eligibility and other documentation related to TPLs for goods imported into the" U.S., CBP said. "Specified quantities of certain textile and apparel imports from Mexico that are eligible for preferential tariff treatment under a TPL must have a valid certificate of eligibility with a corresponding eCERT transmission in order for an importer to claim the preferential duty rate," it said. Upon entry, the goods "must match the eCERT transmission of a certificate of eligibility from Mexico in order for an importer to claim the preferential duty rate," it said. "The transition to eCERT will not change the TPL filing process or requirements. Under this process, importers will continue to provide the certificate of eligibility numbers from Mexico in the same manner as when currently filing entry summaries with CBP. The format of the numbers of certificates of eligibility will not change as a result of the transition to eCERT. CBP will reject entry summaries that claim a preferential duty rate under a TPL when filed without a valid certificate of eligibility in eCERT."
The Commerce Department published notices in the Federal Register Sept. 28 on the following AD/CV duty proceedings (any notices that announce changes to AD/CV duty rates, scope, affected firms or effective dates will be detailed in another ITT article):
The Customs Rulings Online Search System (CROSS) was updated Sept. 24. The following headquarters rulings were modified recently, according to CBP:
A panel of trade experts said managed trade doesn't have to be a dirty word, but that the conflation of national security and economic security is dangerous. The Washington International Trade Association decided to host a discussion on managed trade after an essay was published by Edward Alden called, "Free Trade Is Dead. Risky ‘Managed Trade’ Is Here."