USMCA

Although there were some specific complaints about how USMCA has gone in its first year -- especially what witnesses and senators said was an anemic effort to get Mexico to change its stance on genetically modified agricultural crops -- much of the hearing in the Senate Finance Committee on July 27 explored how USMCA should be seen as a model for future trade agreements.

Mexico's Economy Secretary, Tatiana Clouthier, said she talked about Mexico's concerns about the auto rules of origin with the chairman of the House Ways and Means Committee, the ranking members of that committee and of the Senate Finance Committee, two other Republican senators, and four business groups, including two auto manufacturing trade groups, as well as a major aerospace manufacturer.

The Office of the U.S. Trade Representative announced on July 22 the hiring of:

The Senate Finance Committee will hold a hearing July 27 at 9:30 a.m. to review the implementation of the USMCA one year after it entered into force on July 1, 2020. The witnesses testifying will be:

CBP is in the process of setting up a second investigations branch in its forced labor division, putting to use additional forced labor funding budgeted by Congress for 2021, said Therese Randazzo, director of the agency’s forced labor division, during CBP’s Virtual Trade Week on July 21.

International Trade Today is providing readers with the top stories from July 12-16 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.

One of the obligations Canada and Mexico agreed to in the NAFTA rewrite is a ban on goods made with forced labor, but Baker McKenzie lawyers said it's not clear how much things are changing in that regard. Paul Burns, a Baker McKenzie partner in Toronto, said that while Canada has changed its law to ban the importation of goods made with forced labor, the Canadian customs agency does not disclose information about its enforcement. "We don’t know if there have been any detentions made," he said. "I expect there hasn't been."

A PricewaterhouseCoopers trade and tax expert told an audience at the U.S. Fashion Industry Association Virtual Washington Trade Symposium that while the prospect of trade liberalization in the next few years is low, he does not think that threatened tariffs on apparel and other goods from European countries, Turkey and India will be levied in November, in retaliation for digital services taxes. Scott McCandless, who spoke July 14 at the virtual conference, said that although it will be "a complicated dance both internationally and domestically" to arrive at an agreement on the intertwined issues of minimum corporate taxes and digital services taxes, he thinks it's more likely than not that Congress will pass a tax bill this fall that would give countries the right to levy taxes on multinationals that do business in their countries. If that happens, he said, "The DSTs likely go away, and the proposed tariffs on countries that have DSTs will go away as well."

International Trade Today is providing readers with the top stories from July 6-9 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.

Accumulation of production costs from non-originating intermediate goods is allowed under USMCA for regional value content calculations, just like it was under NAFTA, CBP said. In a recently released ruling requested by Daimler Trucks North America (DTNA), CBP found the commercial vehicle manufacturer can add a tier two supplier’s costs of processing within USMCA territory to the USMCA costs of its tier one water pump supplier, even though the tier two costs were not sufficient to result in an originating material.