Lawyers speaking at the Foreign Trade Association’s World Trade Week event said CBP is already drowning because of the consequences of the massive increase in post-importation tariff exclusions, and they're expecting it to get worse. Michael Roll, from Roll & Harris trade law firm, said he's betting that the Office of the U.S. Trade Representative will reopen the exclusion process for Section 301 tariffs before summer's over. But he expects it will take until late 2021 or early 2022 for exclusions to be granted, which means many imports that entered after exclusions expired, or that never had exclusions, will have been liquidated by the time the importers learn they didn't have to pay the tariff.
Eight House members, four Democrats and four Republicans, wrote to U.S. Trade Representative Katherine Tai that five months of consultations is more than enough, and it's time to push for a binding resolution to the administration of dairy tariff rate quotas in Canada. Under the USMCA, the next steps could be Canada and the U.S. agreeing to conciliation or mediation, or the U.S. could call for a dispute settlement panel. Reps. Ron Kind, D-Wis.; Tom Reed, R-N.Y.; Antonio Delgado, D-N.Y.; Glenn Thompson, R-Pa.; Suzan DelBene, D-Wash.; Dusty Johnson, R-S.D.; Jim Costa, D-Calif.; and David Valadao, R-Calif., sent the letter May 21, and in it noted that Canada reserves part of its quotas for processors in Canada, a factor that undermines the ability of American dairy exporters to use the TRQs.
No date has been scheduled yet for a vote on the China package championed by Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Todd Young, R-Ind., but lengthy amendments from senators are continuing to flow in, many with trade implications.
Sen. Mitt Romney, R-Utah, says there is the potential for a bipartisan consensus on a strategy to compete with China. Romney, who was speaking at a U.S. Chamber of Commerce program May 19, said the two parties are more united than they were two years ago, as they recognize China's threat to liberal democracies. He said that "China’s rise is the result really of their economic resources, and those are resources that are built in part through predatory practices, particularly subsidized or predatory pricing which allows them to put western businesses out of business...."
Congressional Republicans are expressing their dismay at the White House notification earlier this week that it will not be imposing sanctions on the CEO of the primary company building the Nord Stream 2 pipeline from Russia to Germany, even though Congress clearly said it wanted that company to be a sanctions target (see 2104220003). Rep. Andy Barr, R-Ky., said that all congressional sanctions bills give the president the authority to waive the sanctions, and President Joe Biden is choosing to do so.
In a joint statement, Canada's trade minister, Mexico's economy minister and U.S. Trade Representative Katherine Tai said they reviewed USMCA committee work, noting progress and offering “recommendations for future work to maintain progress.”
A former U.S. trade representative and a former deputy national security adviser agree that companies that do business in China are stuck between a rock and a hard place, as they will anger China if they disavow abuses in Xinjiang or Hong Kong, but could break U.S. law if they make clothes with Xinjiang cotton.
The day before the first USMCA Free Trade Commission meeting, U.S. Trade Representative Katherine Tai and Canada's trade minister, Mary Ng, talked about how to strengthen North American supply chains, combat forced labor and climate change, and reform the World Trade Organization.
Dairy trade groups complained to U.S. Trade Representative Katherine Tai that consultations have gone on long enough, and said it's time to open a formal dispute with Canada over its implementation of tariff rate quotas for dairy products. “America’s dairy farmers appreciated USTR initiating consultations with Canada on its dairy TRQ allocation measures and the decision to hold USMCA Free Trade Commission discussions to pursue reforms,” National Milk Producers Federation CEO Jim Mulhern said in a May 16 news release. “But Canada has always been obstinate on dairy, and at this stage it is increasingly clear that further action is needed to ensure a fair and transparent enforcement of USMCA.” The 68 trade groups said the dispute must begin because the next TRQ year begins July 1, but a dispute panel would take longer than that to rule.
Mexico and Canada emphasized how the COVID-19 pandemic has proven the need for interlinked supply chains, but U.S. Trade Representative Katherine Tai emphasized supply chains' downside as she, Mexico's economy minister and Canada's trade minister sat down to the first Free Trade Commission meeting of the USMCA. Tai said, "Not only have we discovered the fragility of our supply chains, but we have just begun to appreciate the degree to which they run counter to our collective goals of ensuring that workers within North America, and outside it, are paid a fair wage, in a safe workplace."