The complexity of the auto rules of origin in both NAFTA and the U.S.-Mexico-Canada Agreement are the result of what one observer calls the "political preoccupation" with retaining domestic auto manufacturing. Eric Miller, president of Rideau Potomac Strategy Group, noted that in NAFTA, that resulted in the tracing list, and in USMCA, that resulted in the labor value content and higher North American value targets, including for specific parts.
A bill that would put tariffs on drugs from China and India was introduced May 15 by Rep. Bill Flores, R-Texas. Flores said the Safe and Secure Medicine Supply for Hardworking Americans Act will guarantee that the U.S. will again lead the world in the development and production of innovative prescription drugs. The bill would require labels to include country of origin of all active ingredients; would give incentives to manufacture in the U.S.; and would penalize importers of tainted prescription drugs. “Some foreign pharmaceutical supply chains dramatically increase the risk of intellectual property theft, interference by foreign governments, tainted drugs, and health care risks for hardworking American families,” Flores said in a press release announcing the bill. He did not say what level of tariffs he is proposing. The bill has no co-sponsors.
The top executive for customs policy at UPS said the consequence of the COVID-19 pandemic will be that companies “reassess everything” about supply chains. Norm Schenk, executive vice president for customs policy, was on a panel that included the director of corporate customs for a major logistics provider, the head of customs for a major automaker, and the executive director of the Georgia Ports Authority. The panelists, hosted by the U.S. Chamber of Commerce on May 19, agreed that even after the crisis is over, trading will not return to how it was.
The struggle the U.S. is having to manage the COVID-19 pandemic is a higher priority than what's happening at the World Trade Organization, said Dennis Shea, U.S. ambassador to the WTO. He noted that the U.S. has a third of the world's reported cases of the disease, and that more Americans have died from COVID-19 than citizens in any other country.
Countries should be coordinating how drugs will be distributed once they are proven to work, drug industry representatives say. Senior officials at the trade group for biologic drugs and the trade group for generics, along with the head of Pfizer's global trade policy, were speaking on a Washington International Trade Association webinar May 14 about the global supply chain for pharmaceuticals and the search for a COVID-19 cure.
House Ways and Means Committee Chairman Richard Neal, D-Mass., said he's told U.S. Trade Representative Robert Lighthizer that he's concerned that some businesses were not able to take advantage of a 90-day deferral to pay duties. “Because of the economic circumstances we find ourselves in, I think providing some relief on that front is sensible,” he said to International Trade Today in a brief hallway interview at the Capitol May 15.
Many details needed for the uniform regulations and the final implementing instructions for the U.S.-Mexico-Canada Agreement remain under discussion, agency officials said on May 14. Many specifics have not been agreed to, either between Mexico, Canada and the U.S., between the Office of the U.S. Trade Representative and the auto industry, or between CBP and USTR. “There's still even discussions with USTR and the [auto] industry on what constitutes a core part,” Maya Kumar, director for textiles and trade agreements, told members of the trade community on a conference call.
Dockworkers' strikes, hurricanes and the trade war have all been major problems for importers and exporters at various points in the last 20 years, but the impact of COVID-19 dwarfs them all, panelists and listeners said on a webinar during the National Association of Foreign-Trade Zones virtual conference May 13.
House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., and Rep. Peter DeFazio, D-Ore., want the U.S. to withdraw from the World Trade Organization. If their resolution, and the resolution introduced by Sen. Josh Hawley, R-Mo., were to pass before the deadline set up in the agreement that founded the WTO, and Trump either signed it, or they overrode his veto, the U.S. would exit the institution. “It is time for the United States to withdraw from this institution and start prioritizing American workers over international corporations,” Pallone said in a press release.
Rep. Kevin Brady, R-Texas, would like to join with some congressional Democrats in a conversation with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer about “flexibility or time extension on the tariff relief,” he said during a conference call with reporters May 13. Brady, the ranking member of the House Ways and Means Committee, said that although tariff savings from a deferral of regular customs duties may not “seem large for individual businesses, it can be very important for them retaining their workers and riding the crisis out.”