The Senate Environmental and Public Works Committee sent the U.S.-Mexico-Canada Agreement out of committee on a 16-4 vote, and the Budget Committee moved the implementing bill with a voice vote, though several senators voted no there, as well.
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.
Daimler CEO Ola Kallenius told reporters that Mercedes-Benz's transition plan for auto rules of origin under the U.S.-Mexico-Canada Agreement will take three or four years. Kallenius, who was responding to a question from International Trade Today after a Q&A at the Washington Economic Club Jan. 10, did not say explicitly that the carmaker would be applying for the extension, which would require the company to show how Alabama production -- not just Mexican production at its joint venture with Nissan -- will meet the tougher standards. If it will take Mercedes four years to meet the standard, they would need an extension.
After the Senate Parliamentarian ruled that six other committees besides Finance need to consider the U.S.-Mexico-Canada Agreement, five of those committees have scheduled hearings or meetings to deal with the implementing bill next week. The Budget and the Environment committees will take it up Jan. 14; the Health, Education, Labor and Pensions and the Commerce committees will take it up Jan. 15; and the Foreign Relations Committee will take it up Jan. 16. If the Appropriations Committee were to also have a hearing next week, a vote could come the following week, but Appropriations has not scheduled a hearing.
The U.S. Chamber of Commerce laid out its priorities for trade in 2020, and most of them were well-known in 2019: getting USMCA passed; ending steel and aluminum tariffs; negotiating comprehensive trade agreements with Japan, the European Union and the United Kingdom. But lesser-known priorities are: ensuring that new regulations on foreign ownership of American firms are focused on national security issues, and arguing for a balanced approach in the regulations from the Export Control Reform Act of 2018 that protect “national security without unduly hindering legitimate commerce.” The Chamber also said Jan. 9 that it wants Congress to approve “permanent normal trade relations with Kazakhstan and its graduation from the Jackson-Vanik amendment to the Trade Act of 1974.”
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said he's been told it's going to take three or four days for six other Senate committees to clear the U.S.-Mexico-Canada Agreement so that it can go to the floor for a vote. Whether it can come up the week of Jan. 21 will depend on whether the articles of impeachment have arrived by then, he noted.
The Senate Finance Committee has recommended the U.S.-Mexico-Canada Agreement come up for a vote in the Senate as a whole, voting 25-3 Jan. 7 to advance the deal. Committee Chairman Chuck Grassley, R-Iowa, told reporters that the USMCA implementing bill also has to get buy-in from the Budget, Environment and Commerce committees, though they don't have to hold mark-up hearings, as the Finance Committee did. He predicted that if the articles of impeachment aren't sent over to the Senate yet, “by next week, for sure,” there would be a floor vote, but if the articles arrive, he said, it could be the end of January before a vote.
The Congressional Research Service released a report Jan. 3 on issues and provisions surrounding the state-state dispute settlement mechanism in the U.S.-Mexico-Canada Agreement, including explanations of the consultation, panel establishment and resolution process. The report also includes potential considerations for Congress, including whether it should use USMCA's dispute resolution system as a ”template” for future Trade Promotion Authority legislation.
International Trade Today is providing readers with some of the top stories for Dec. 23-27 in case they were missed.
Even though the U.S.-Mexico-Canada Agreement has not finished its ratification path through Canada and the U.S. Senate, industry is already looking to how CBP will make the changes a reality, perhaps as early as May 2020. “This is going to move out of the Beltway political sphere and really get into the practical, everyday pain in the neck, painstaking trade world,” said Dan Ujczo, a partner at Dickinson Wright and a customs and trade lawyer who specializes in North American trade. A CBP official said last month that agency discussions for how to implement some USMCA provisions are underway (see 1911070015).
International Trade Today is providing readers with some of the top stories for Dec.16-20 in case they were missed.