The U.S. and Mexico reached an agreement for how to remediate labor issues at a General Motors factory in Silao, Mexico, U.S. Trade Representative Katherine Tai said in a July 8 news release. The remediation plan is a result of the first use of “rapid response” provisions for addressing labor issues under USMCA (see 2105120007), the agency said in another release. “Reaching an agreement with Mexico on a remediation plan shows the USMCA’s potential to protect workers’ rights and the benefits of a worker-centered trade policy,” Tai said. “Fully implementing and enforcing the USMCA not only helps workers there, it also helps American workers by preventing trade from becoming a race to the bottom. Our agreements must be more than words on a page, and the United States will use every avenue to protect workers and ensure that Americans compete on a level playing field.”
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.
Revisions to the tariff schedule over the past six months echoed the back and forth between the U.S. and the European Union over retaliatory tariffs under both the Airbus and digital services tax disputes. Provisions for new tariffs were added then suspended, some immediately. Other changes include updates for USMCA tariff-rate quotas, a Section 301 exclusion extension and an extension to Section 201 safeguards on large residential washers.
The International Trade Commission posted Revision 5 to the 2021 Harmonized Tariff Schedule. The semiannual update to the HTS removes General Note 12 for NAFTA from the tariff schedule, and adds new tariff numbers for a variety of products, including frozen warmwater shrimp, tomatoes, organic berries and high-strength steel. All changes take effect July 1, unless otherwise specified.
CBP's proposed use of Part 102 marking rules to determine the country of origin for non-preferential claims under USMCA (see 2107010045) would create an imbalance between USMCA member countries and the rest of the world, possibly in violation of U.S. commitments to the World Trade Organization, Sidley Austin lawyer Ted Murphy said in a blog post. There is questionable legal basis for continued use of the NAFTA marking rules in USMCA and the expanded use for determining origin on non-preferential claims, he said. “CBP may be attempting to gloss over this issue by trying to tie the proposal to the 'implementation' of USMCA (see the title of the notice of proposed rulemaking),” Murphy said.
The Commerce Department released a redacted version July 6 of its Section 232 report on the national security implications of U.S. imports of autos and auto parts. The Bureau of Industry and Security posted the report and its appendices, dated Feb. 17, 2019. Then-Commerce Secretary Wilbur Ross suggested two scenarios for tariffs that the Trump administration could impose if USMCA negotiations weren't productive. No tariffs were imposed as a result of the report, but the possibility of tariffs remained a threat for years after.
A CBP proposal to expand the use of Part 102 marking rules to determine the country of origin for non-preferential claims (see 2107010045) could be controversial, law firm Neville Peterson said in a July 6 blog post. The proposal to use tariff shift rules of Part 102 “would preclude the use of the traditional 'substantial transformation' test of a change in name, character or use,” it said.
The Customs Rulings Online Search System (CROSS) was updated July 2. The following headquarters rulings were modified recently, according to CBP:
The International Trade Commission posted Revision 5 to the 2021 Harmonized Tariff Schedule late on July 2, following resolution of technical issues that had delayed its publication. The semiannual update to the HTS removes General Note 12 for NAFTA from the tariff schedule, and adds new tariff numbers for a variety of products, including frozen warmwater shrimp, tomatoes, organic berries and high-strength steel. All changes take effect July 1, unless otherwise specified.
Cynthia Whittenburg, who retired as CBP deputy executive assistant commissioner in the Office of Trade earlier this year (see 2102090059), joined the National Customs Brokers & Forwarders Association of America Educational Institute (NEI) as an associate director, the trade association said in an emailed July 6 news release. Whittenburg will “assist in expanding the delivery of our content though institutions of higher learning as well as other appropriate avenues as well as assist in the development of additional courses needed to continue our mission,” NEI Executive Director Kiko Zuniga said. “Some of these courses will deal with current issues such as forced labor, USMCA, to name a few.” While at CBP, Whittenburg helped in examining the need for continuing education requirements for customs brokers (see 1910160056), an issue that CBP is still working on and that the NEI is following closely (see 2105040004).
International Trade Today is providing readers with the top stories from June 28 - July 2 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.