Auto Industry Asks USTR Not to Push for June 1 Date of Entry Into Force for USMCA
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.”
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The statement, released March 16, said auto industry officials are “gravely concerned” that the administration is considering setting the date of entry into force as June 1, when they haven't even seen a draft of new automotive rules of origin regulations. “While the industry is doing as much work in advance as they can, once the uniform regulations are available, it will still take an additional period of time to solicit the necessary information throughout the supply-chain to certify that our cars and trucks qualify under USMCA.” They said that without uniform regulations, there are unanswered questions of how to interpret the new rules of origin.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, told International Trade Today that he thinks the auto industry has a good argument, “and this issue is critical to the integrity of a new trade agreement.” He said that he's also concerned about the June 1 date, given that industry doesn't have enough information from the government on how to comply with the new rules. He said there's still time for Congress to advocate for a different date of entry into force. “I hope we don’t create new obstacles or uncertainty, particularly when a supply chain that’s already got problems is part of the issue,” he said on a conference call with reporters. “I think the administration would be wise to reconsider and have some flexibility for the sake of our economy.”
A spokesperson from the Office of the U.S. Trade Representative did not respond to a request for comment by press time. The office of the chairman of the House Ways and Means Committee confirmed that USTR has said June 1 is “a possible date.” A spokeswoman said the chairman is still evaluating the impact of trying to manage the spread of the coronavirus disease COVID-19 on implementation and timing of the date of entry into force.
The top Democrat on the Senate Finance Committee, Ron Wyden of Oregon, did not speak directly about the auto industry's argument, but his office said: “A trade agreement should only enter into force when facts indicate that our trading partners are complying with the obligations in the agreement, not an arbitrary date determined by political motive. It would be a mistake to enter an agreement into force prematurely because doing so jeopardizes the benefits of the agreement that are hard fought wins intended to benefit American workers, farmers, ranchers, and innovators.”
Myron Brilliant, the U.S. Chamber of Commerce's lead official on trade, told reporters March 16 that companies have been telling the administration that June 1 is too soon. “It's not a date we think should be hard and fast,” he said.
Brilliant said USTR should make sure "that industry isn’t hurt at a time they’re already struggling with coronavirus; we don’t want to pile on by creating some arbitrary date.” He said he's confident that "the administration's beginning to hear that.”