CBP's proposal for how to classify garments with 50/50 fiber blends would add a "significant amount of additional burden on importers of apparel and made-up textile articles," HanesBrands said in comments filed May 2 with the agency. The filing was in response to CBP's proposed ruling revocation that seems to change how goods of 50/50 blends are classified (see 1905020044). Under the proposal, the tariff classification of the fibers in the 50/50 blend are first considered (e.g., cotton of chapter 52 versus man-made filaments of chapter 54), then the entire garment is classified according to whichever of those constituent fibers in the 50/50 blend is classified last in numerical order.
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.
A vote on the U.S.-Mexico-Canada Agreement will “hopefully” be soon, House Speaker Nancy Pelosi said, but stressed that the deal needs strong enforcement provisions before any progress will be made. During a Washington Post Live interview on May 8, Pelosi said an enforcement agreement is a prerequisite to any vote. “Unless you have it built into the agreement … it’s not binding on the other country. It’s us talking to ourselves,” she said. In a recent conversation with U.S. Trade Representative Robert Lighthizer, Pelosi said, she urged him to include enforcement in the agreement, or else the agreement is “not a serious thing.” Pelosi said the Trump administration has expressed a desire to work on enforcement and said Trump has told her “we want to get to a yes” on the deal. “So hopefully that will be soon,” she said.
International Trade Today is providing readers with some of the top stories for April 29 - May 3 in case they were missed.
Even as it described the cloudy outlook for the new NAFTA's ratification, a new report from the American Council for Capital Formation's Center for Policy Research says policy makers should ratify the agreement, and not move toward a withdrawal from NAFTA.
The chairman of the House Ways and Means Committee, its Trade Subcommittee chairman and all but four of the Democrats on the panel told U.S. Trade Representative Robert Lighthizer that biologics provisions in the new NAFTA concern them, because they could hamper Congress' ability to address the rising cost of health care. "Our concern is not that the new Agreement will change U.S. law. But at the same time, we do not want to be limited in addressing the current health care landscape, which is not working for many Americans," they wrote in a letter released the evening of May 3. "Our laws and regulations provide incentives and safeguards that encourage and allow generic competitors to enter the market when appropriate, lowering costs over time. As the health care industry evolves, Congress develops and sometimes revisits key legislation that sets out these rules, addressing the balance between innovation and access."
CBP's proposed ruling revocation on garments with 50/50 blends of fiber (see 1904050037) seems to indicate a big shift in the way the agency classifies garments and other finished textile goods, according to industry experts. The proposal is a "significant change in policy," Sandler Travis lawyer Elise Shibles said in a May 2 email. The proposal "could significantly impact a wide range of imported goods, including their duty rates, qualification for free trade agreements, and sourcing supply chains," she and trade consultant Tom Gould said in a post on the firm's website.
AFL-CIO President Richard Trumka tweeted earlier this week that workers "want to get to yes" on the NAFTA rewrite, and House Speaker Nancy Pelosi said May 2 that Democrats in the House do, too.
House Majority Leader Steny Hoyer, speaking about the meeting of top Democrats at the White House April 30, said that they told the president "we're not there yet" on the new NAFTA, and added " that enforcement will be an important part of the consideration."
Reforms of Mexico's labor laws passed its Senate overwhelmingly April 29, and that vote was hailed by U.S. Trade Representative Robert Lighthizer. "These reforms will greatly improve Mexico's system of labor justice and are exactly what labor leaders in the United States and Mexico have sought for decades. As we move forward with the ratification of USMCA, the Trump Administration will work closely with members of the United States Congress and the Mexican government to ensure these reforms are implemented and enforced," his office said in a statement the evening of April 29.
If House Speaker Nancy Pelosi doesn't bring the new NAFTA to a vote, NAFTA could stay in place, Acting White House Chief of Staff Mick Mulvaney said at a conference April 30. Mulvaney dismissed the Democrats' argument that the U.S.-Mexico-Canada Agreement could be amended in discrete ways to satisfy their complaints before going to a vote. Interviewer Maria Bartiromo pointed out that Democrats say "I'm not signing it in its current form."