The draft regulations for auto rules of origin that have been circulating suggest that the rules won't be as flexible or practical as automakers would like, said David Bause, a project manager at MIC Customs Solutions. Bause, who spoke about the new NAFTA on a webinar April 9, used to be a customs manager for General Motors. Bause said stakeholders don't even know what the date of entry into force will be, or if the uniform regulations will be released by then. He said, “Logically one would think the earliest EIF is July 1 at this point, but from what we’re hearing, the U.S. government is still talking about June. Not sure that is technically possible.”
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Mexico's undersecretary for foreign trade said July 1 is the earliest the new NAFTA could go into effect, but also suggested that an August or September date of entry into force would be fine. Luz Maria de la Mora spoke on a webinar hosted by the Wilson Center's Mexico Institute on April 7.
The Canadian government has sent its letter to the U.S. and Mexico certifying it is ready for the USMCA date of entry into force, Deputy Prime Minister Chrystia Freeland announced April 3, but a top Mexican official said his country did not certify it was ready by March 31, which means a June 1 date of entry into force is out of reach.
Nineteen of the 28 senators on the Finance Committee -- including Chairman Chuck Grassley, R-Iowa, and top Democrat Ron Wyden of Oregon -- told U.S. Trade Representative Robert Lighthizer that having the U.S.-Mexico-Canada Agreement start on June 1 is too soon.
The Commercial Customs Operations Advisory Committee (COAC) for CBP will next meet April 15, remotely, beginning at 1 p.m., CBP said in a notice. Comments are due in writing by April 14.
CBP should look at “extending the liquidation of all unliquidated entries by 90 or 180 days,” the Business Alliance for Customs Modernization told the agency in a March 23 letter. Those extensions “would help ensure that importers who may be eligible for duty refunds (e.g., based on Section 232 or Section 301 product exclusion approvals) do not miss opportunities to pursue such refunds administratively due to staffing issues caused by COVID-19.” BACM offered its support for deferring collections of customs duties and asked “that payments related to past liabilities, such as denied protests, also be temporarily deferred.” BACM suggested several other items it said “would help ease the burden on the trade community during this time.”
The language of the U.S.-Mexico-Canada Agreement says that in order for the treaty to take effect on June 1 -- as U.S. officials have told Congress they want -- the countries would have to agree that they're ready 12 days from now. Kenneth Smith Ramos, a former top negotiator of the NAFTA rewrite, said the three countries cannot say they've completed their internal procedures by then. “#NotHappening,” he wrote in English at the end of a tweet in Spanish.
The auto industry publicly asked the Trump administration not to rush into certifying readiness for the U.S.-Mexico-Canada Agreement's entry into force, given the fact that “a global pandemic is significantly disrupting our supply chains, and the industry is throwing all available resources into managing production through this crisis for our employees and for the broader U.S. economy.”
Canada's House of Commons approved the U.S.-Mexico-Canada Agreement -- called CUSMA in Canada -- by unanimous consent March 13, before adjourning until April 20 due to the coronavirus pandemic. The Canadian Senate passed it less than an hour later. Royal Assent, the equivalent of a presidential signature in the U.S., followed shortly, and the Senate adjourned as well. Now, all three countries must continue to work on uniform regulations so that they can certify the treaty is ready to enter into force. Efforts to slow the spread of the coronavirus disease COVID-19 may slow that process, because the countries also have to evaluate the progress toward fulfilling commitments, such as setting up labor courts in Mexico and getting new rules of origin processes in place. Once that certification is issued, NAFTA will be replaced on the first day of the third month after the announcement.