The United Kingdom issued arrangements for how it will handle documentation and other information during trade negotiations with the U.S., according to an April 24 notice. The arrangements reflect both countries’ desire to keep the information “confidential,” the U.K. said, although the governments have “the discretion and autonomy to share information with bodies, groups or individuals.”
Although the hearing scheduled for input on a Kenya Free Trade deal was canceled, comments continue to come in for what the U.S. trade representative's priorities should be.
High-level Office of the U.S. Trade Representative and senior Brazilian officials agreed April 16 to “accelerate ongoing trade dialogue under the Brazil-U.S. Commission on Economic and Trade Relations (ATEC) with a view to concluding in 2020 an agreement on trade rules and transparency, including trade facilitation and good regulatory practices,” USTR said in a statement issued the following day. “They also agreed to engage in domestic consultations, consistent with each country’s domestic procedures, to solicit input on how best to expand trade and develop the bilateral economic relationship,” the statement said.
The Office of the U.S. Trade Representative issued a pre-publication notice April 20 that carmakers must submit draft staging plans under the U.S.-Mexico-Canada Agreement no later than July 1. Their final plans are due by Aug. 31, the notice said. If USTR approves the plans, companies would have five years instead of three to increase regional content and adjust to other changes in the auto rules of origin. In order to be approved, the companies must show how every model can meet the stricter standards, even if that can't be done within the five-year time frame. Many cars imported from Mexico do not meet the current standards and pay the 2.5% duty. “The petitioner also should identify any North American investments and sourcing, preferably by calendar year and location, which will allow such vehicles to meet the standard USMCA rules,” USTR said.
Braumiller Law Group attorneys told webinar listeners April 20 that outside of the automotive sector, the U.S.-Mexico-Canada Agreement has more liberal rules of origin than NAFTA. Jim Holbein said that the decision on whether a product qualifies based on tariff shift is a “much simpler rule to apply. I believe that’ll be useful, particularly if your process for obtaining origin is based all on NAFTA.” He gave the example of a flat-screen TV assembled in Mexico, which currently has content percentage rules. Under USMCA, if the manufacturing process qualifies as substantial transformation, that's enough to count as Mexican.
CBP has drafted some interim implementing instructions for the U.S.-Mexico-Canada Agreement that could be released as soon as April 17, a CBP official said during an April 16 conference call. The draft is being circulated within the government and is planned to eventually go up on CBP's website, she said. The instructions will detail how to file an entry, and the Special Program Indicator code will be S, she said. There's also some discussion about an S+ code for agricultural goods with special requirements, similar to the CAFTA-DR codes, she said. A CSMS message would announce the release of the instructions, she said.
As a date of entry into force, June 1 “is too aggressive and unrealistic,” said The American Association of Exporters and Importers in a letter sent April 15 to the U.S. trade representative. The organization did not say what day would be late enough for traders, who are affected by the COVID-19 public health emergency. “Many companies have personnel working from home due to COVID-19, which will make responses to queries for data slower, thereby causing delays in the certification process for USMCA,” they said. But they noted that without final regulations, “it is impossible for companies to know if there will be an impact or if supply chains may need to be shifted.” Once the regulations are in place, AAEI said, it will take time to solicit documents from suppliers. The group asked that NAFTA certificates of origin for 2020 continue to be valid during a period of informed compliance until Jan. 1, 2021.
A group of 31 House lawmakers, led by Rep. Haley Stevens, D-Mich., and Rep. Jackie Walorski, R-Ind., is asking the U.S. trade representative to delay the switch-over to the U.S.-Mexico-Canada Agreement auto rules of origin (ROO), even as the USMCA takes over from NAFTA. The group's letter, sent April 10, said the delay “is necessary to allow the auto industry an appropriate adjustment period and account for delays caused by the COVID-19 pandemic. Alternatively, we ask that you seriously consider other accommodations or flexibilities that will allow the automotive sector to avoid being penalized by the new requirements upon the agreement’s entry into force.”
The U.S. trade representative and Brazil's Foreign Affairs minister discussed ways to deepen discussions under the Agreement on Trade and Economic Cooperation, the Office of the U.S. Trade Representative said April 10. Another call is to take place next week, to both flesh out areas of agreement and tackle irritants. USTR will consult with Congress, as well, on “how best to expand trade and develop our economic relationship.”
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.