USMCA

CBP issued the following releases on commercial trade and related matters:​

The rules for forced labor documentation will likely become as detailed as the rules on conflict mineral reporting, Angelica Tsakiridis, a senior manager at Deloitte, said July 1 at a virtual conference hosted by the American Importers and Exporters Association. CBP has been working on a rulemaking around forced labor for years (see 1805100026), but it remains to be seen whether documentation requirements will be included.

CBP issued an interim final rule that implements several provisions included within the USMCA. The rule, which took effect July 1, implements USMCA language on import and export requirements, "general verifications and determinations of origin, commercial samples, goods re-entered after repair or alteration in Canada or Mexico, and penalties," among other things. Another interim final rule to implement other USMCA provisions will also be issued "at a later date," said CBP.

Rep. Jodey Arrington, a Republican on the Ways and Means Committee, was cool to fellow Texas delegation member Sen. John Cornyn's proposal to study the possibility of allowing goods made in foreign-trade zones to be considered originating under USMCA.

New regulations issued by CBP that implement USMCA provisions took effect on July 1, the agency said in a notice released the same day. The interim final rule implements USMCA language on import and export requirements, "general verifications and determinations of origin, commercial samples, goods re-entered after repair or alteration in Canada or Mexico, and penalties," among other things, CBP said.

The top trade officials in the U.S., Canada and Mexico gathered virtually to celebrate the one-year anniversary of USMCA, which is July 1, with Canadian and Mexican ministers emphasizing the worth of integrated supply chains and U.S. Trade Representative Katherine Tai emphasizing the elements of USMCA that protect workers in the region and around the world. Tai said at a Wilson Center program June 30, "A good next step in this increased cooperation can be on the issue of forced labor. The USMCA includes a strong obligation to prohibit the importation of goods produced with forced labor. Working together to address this critical economic and moral issue would send a powerful message to the world."

Government representatives who oversee labor issues from Canada, the U.S. and Mexico held the first meeting of the USMCA Labor Council, and discussed both the implementation of Mexico's labor law reform and a complaint about the treatment of Mexican migrant workers in the U.S., and how abuses of migrant workers could be avoided in the future, whether through education and oversight through U.S. government agencies, or a better way of running seasonal work visas.

Sen. John Cornyn, R-Texas, introduced a bill that would require a study of whether Canadian and Mexican manufacturers are able to get tariff breaks on non-North American inputs to their goods, and if so, does that affect the cost-competitiveness of products manufactured in the U.S. for domestic and export markets. Cornyn led an unsuccessful effort to convince the Office of the U.S. Trade Representative in 2020 that goods produced inside foreign-trade zones should be treated as products of the U.S. (see 2012020031).

The Office of Information and Regulatory Affairs recently finished its review of a proposed rule on “Non-Preferential Origin Determinations for Merchandise Imported from Canada or Mexico for Implementation of the Agreement Between the United States of America, the United Mexican States, and Canada,” OIRA said in a notice. The Department of the Treasury said in its regulatory agenda it aims to complete the proposal by July (see 2106140025).

A senior U.S. Chamber of Commerce official submitted follow-up comments on rapid response petitions, complaining that a petition is in a state that is not yet required to complete its ratification or rejection of union contracts, and that an alleged violation happened in part before July 1, 2020, when the USMCA went into force. The Chamber said this petition that comes before the deadline “carries the potential to set a dangerous precedent.” Glenn Spencer, senior vice president in the employment policy division, wrote to the Office of the U.S. Trade Representative June 23, saying that “[t]he possibility of imposing remedies on a facility for failure to comply with the USMCA before the USMCA entered into force is a violation of the right to due process and should not be tolerated.” He also said that the owner of a facility that is being investigated for a denial of rights “must be included in consultation and remediation efforts resulting from a review.”