The dispute panel grappled with what Mexico characterized as "the heart of the dispute" in its second day of a hearing about whether Canada and Mexico or the U.S. is right about one aspect of the complex USMCA auto rules of origin.
Dispute panelists chosen by the U.S., Canada and Mexico grappled with whether Mexico and Canada should have understood the implications of how core parts origination could be established as they negotiated the language in the automotive annex and the standard rules of origin chapter in the USMCA.
In filings at the USMCA Secretariat, Mexico and Canada say the Uniform Regulations for USMCA are clear, and say that " roll-up applies to the calculation of [regional value content] RVC for a vehicle. It obliges Parties to take 'no account' of the non-originating materials contained in an originating good when that good is used in the subsequent production of another good."
Senate Finance Committee members praised the experience of Doug McKalip, the administration's nominee to be chief agricultural negotiator in the Office of the U.S. Trade Representative. McKalip, a senior adviser on international trade policy and other matters to the agriculture secretary, is a career staffer at USDA.
A controversial electric vehicle purchase tax credit (see 2203010064) that was limited to cars and trucks assembled in U.S. plants by union workers has been changed to a tax credit that says the vehicle has to have final assembly in North America. Purchases of new clean vehicles (they can include fuel cells, not just EVs) are eligible for a $7,500 tax credit for buyers whose joint income is below $300,000 or an individual taxpayer with a modified adjusted gross income of $150,000 or less.
U.S. Trade Representative Katherine Tai asked for consultations with Mexico over a 2021 amendment to Mexico's Electric Power Industry Law that privileges the state-owned electric utility, and over 2019 and June 2022 actions that privilege PEMEX, Mexico's state-owned oil and gas company.
Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, said USMCA is crucial to the country's economic recovery from the pandemic "because it was developed with the future in mind."
The Office of the U.S. Trade Representative said that as a result of a labor rights complaint under USMCA, a Panasonic plant's management reimbursed workers for dues it had deducted for a union contract that workers did not choose, and negotiated a contract with an independent union that would provide a "significant wage increase."
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Mexico's Undersecretary for Foreign Trade Luz Maria de la Mora said that Mexico is working to complete the goals of the trade facilitation chapter in USMCA, so that with transparency and information sharing, even small businesses can access expedited release. De la Mora, who spoke in Spanish during a press conference in Vancouver, Canada, also attended by U.S. Trade Representative Katherine Tai and Canada's trade minister. She said that all three countries have the goal of secure borders, but also borders that allow businesses to be competitive.