CBP is now using audits in some cases to make sure e-commerce importers are compliant with the regulations, John Leonard, acting executive assistant commissioner for trade, said while speaking during a Coalition of New England Companies for Trade conference May 13. “We have begun to utilize them in the small package space, but it's baby steps,” he said. Many of the “stakeholders are not traditional importers that will have a normal set of auditable books and records that we're used to with larger entities.”
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.
The Mexican ambassador to the U.S. publicized a letter he sent to Labor Secretary Marty Walsh asking for consultations under the Labor Chapter of USMCA over the treatment of agricultural and meatpacking workers. "Although at the federal level labor rights in the United States protect all workers, regardless of their immigration status, in practice, factors such as ignorance, fear and abuse by some employers prevent migrant workers from exercising fully their labor rights in some industries and states," Esteban Moctezuma wrote May 12. He complained that there is no federal regulation for heat stress, and that employers do not comply with rest and bathroom protocols for agriculture workers. He said that agriculture workers are excluded from general wage and hour laws that provide for overtime pay and the right to organize and bargain collectively. Specifically, he said, undocumented workers don't have access to ask for reinstatement to jobs or payment of lost wages under the U.S. labor laws. And he said that officials overlook sexual harassment and violence in both sectors. "For the aforementioned reasons, the Government of Mexico considered it necessary to point out the importance of adequately enforcing its federal regulations to guarantee the labor rights of workers in the agricultural and meat processing and packaging industries in the United States," he wrote.
While the timing of the announcement of the first rapid response mechanism complaint was clearly political, according to the CEO of the Business Coordinating Council of Mexico, that doesn't mean that businesses shouldn't expect a stream of complaints to follow. Sergio Gómez Lora, who was speaking on a Thompson Hine webinar May 12, said that's challenging for companies, because it is the union, not their own actions, that could be the problem, even though it is the company that could face the penalty of a tariff on its exports to the U.S.
U.S. Trade Representative Katherine Tai, in her second day of testimony on Capitol Hill, heard again and again from members of Congress who are hearing from companies in their districts that they want Section 301 tariff exclusions back. She heard repeatedly that the 9% countervailing duties on Canadian lumber are making a bad situation worse. And she heard that the Miscellaneous Tariff Bill and Generalized System of Preferences benefits program should be renewed. On each topic, both Democrats and Republicans shared concerns, though on GSP, Republicans only spoke of the cost to importers, while Democrats worried about the effects of GSP on the eligible countries. Tai testified for more than four hours in front of the House Ways and Means Committee on May 13.
The Customs Rulings Online Search System (CROSS) was updated May 12. The following headquarters rulings were modified recently, according to CBP:
A day after Mexico's Labor Department announced it would require a new union vote at a General Motors plant -- and that it referred the case to state authorities for a criminal investigation -- the Office of the U.S. Trade Representative announced it is asking Mexico to review whether workers at the GM factory in Silao were being denied labor rights. That makes the GM case the first for the new rapid response mechanism, since the Biden administration has not yet decided whether it will pursue the AFL-CIO complaint announced May 10.
The Office of Information and Regulatory Affairs recently began a review of a proposed rule on “Non-Preferential Origin Determinations for Merchandise Imported from Canada or Mexico for Implementation of the Agreement Between the United States of America, the United Mexican States, and Canada,” OIRA said in a notice. OIRA received the proposal from the Treasury Department's customs operations May 11.
Thea Lee, a former AFL-CIO trade economist and top official for 20 years, will be leading the Department of Labor's Bureau of International Labor Affairs, which is involved in both enforcement of the USMCA labor chapter and in investigating forced labor and the worst forms of child labor. The AFL-CIO reacted to the news of her appointment by saying “there is no better person to help strengthen enforcement of labor standards that increase the power of workers in the U.S. and around the world. She will also help shape policies to end forced labor and egregious worker rights violations throughout global supply chains.” The job is not one that requires Senate confirmation.
The first complaint under a new rapid response mechanism under USMCA, which targets a particular workplace, could take months to resolve, but even if the complaint is found valid, there will be no direct impact on exports from the auto parts factory this year.
The Customs Rulings Online Search System (CROSS) was updated May 4. The following headquarters rulings were modified recently, according to CBP: