CBP will be “implementing new requirements in ACE for processing entries subject to the new U.S.-Mexico-Canada trilateral trade agreement (USMCA)” on July 1, the agency said in an updated ACE deployment schedule. That's the same day the USMCA takes effect. CBP also has determined it will deploy Electronic Vessel Manifest Confidentiality in ACE on May 22, and it removed “Analytical Formula for Continuous Bond Sufficiency due to change in project scope,” according to the change log.
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.
A former AFL-CIO attorney has joined the House Ways and Means Committee trade staff to help oversee the U.S.-Mexico-Canada Agreement, Chairman Richard Neal, D-Mass., announced May 18. “Critical to the USMCA’s success is its proper implementation, particularly of its rigorous general and labor enforcement mechanisms,” he said. “I am delighted to welcome Ms. [Kelly Marie] Fay Rodríguez to the Ways and Means Committee trade staff. Her legal background and experience organizing and engaging with workers and the labor community in the United States and overseas make her a valuable complement to our existing team of talented professionals.”
The complexity of the auto rules of origin in both NAFTA and the U.S.-Mexico-Canada Agreement are the result of what one observer calls the "political preoccupation" with retaining domestic auto manufacturing. Eric Miller, president of Rideau Potomac Strategy Group, noted that in NAFTA, that resulted in the tracing list, and in USMCA, that resulted in the labor value content and higher North American value targets, including for specific parts.
International Trade Today is providing readers with some of the top stories for May 11-15 in case they were missed.
Many details needed for the uniform regulations and the final implementing instructions for the U.S.-Mexico-Canada Agreement remain under discussion, agency officials said on May 14. Many specifics have not been agreed to, either between Mexico, Canada and the U.S., between the Office of the U.S. Trade Representative and the auto industry, or between CBP and USTR. “There's still even discussions with USTR and the [auto] industry on what constitutes a core part,” Maya Kumar, director for textiles and trade agreements, told members of the trade community on a conference call.
President Donald Trump issued an executive order on May 15 that establishes a task force focused on forced labor issues under the U.S.-Mexico-Canada Agreement. “The Task Force shall be chaired by the Secretary of Homeland Security and shall be composed of representatives from the Department of State, the Department of the Treasury, the Department of Justice, the Department of Labor, and the Office of the United States Trade Representative,” it said. “The Chair may invite representatives from other executive departments or agencies, as appropriate, to participate as members or observers.” House Democrats recently complained that the task forced hadn't been created by the required April 28 deadline (see 2005120035).
The Democratic members of the House Ways and Means Committee have told the leaders of CBP and the Department of Homeland Security that the failure to establish the Forced Labor Enforcement Task Force by the April 28 deadline in statute is unacceptable.
CBP is using a new center focused on implementation of the U.S.-Mexico-Canada Agreement to help with the process, the agency said in a May 11 news release. “Staffed with CBP experts from operational, legal, and audit disciplines, as well as with virtual representatives from Canadian and Mexican customs authorities, the USMCA Center is a cornerstone of CBP’s USMCA implementation plan and will serve as a central communication hub for CBP and the private sector community, including traders, brokers, freight forwarders and producers, ensuring a smooth and efficient transition from the North American Free Trade Agreement to USMCA,” it said.
While the U.S.-Mexico-Canada Agreement allows importers to certify goods as deserving tariff benefits -- not just producers or exporters -- KPMG warned webcast listeners that if the importer and producer aren't related parties, it could be a mistake. Andrew Doornaert told listeners on May 11, “It would be a risk if you’re just relying on the exporter’s old NAFTA certificate.”
The Office of the U.S. Trade Representative is disinclined to offer an informed compliance period for most importers, “because most of the rules of origin have remained essentially the same” as what was in NAFTA, so CBP can honor the U.S.-Mexico-Canada Agreement claims with the same information that backed NAFTA claims, according to Brenda Smith, executive assistant commissioner of CBP’s Office of Trade.