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USMCA Implementation Would Require Numerous Changes to U.S. Law, USTR Says

USMCA

Changes to existing law are necessary to bring the U.S. into compliance with a number of obligations under the U.S.-Mexico-Canada Trade Agreement, according to a recent document from the Office of the U.S. Trade Representative. Legislation to implement the USMCA could be introduced and considered by Congress within the next few months, although the recent federal government shutdown and the prospect of another shutdown beginning in February could further delay such action.

Among the USMCA provisions USTR identifies as requiring statutory changes are the following.

Agriculture

  1. eliminating tariffs on some goods and creating tariff-rate quotas on others, including dairy, sugar, sugar-containing products, peanuts and peanut products, and cotton;
  2. exempting goods that qualify for preferential treatment under the USMCA from any duty imposed under the special agricultural safeguard authority;
  3. clarifying that Mexican and Canadian goods subject to most-favored-nation tariff treatment can be subject to the special agricultural safeguard

Drawback

  1. revising the exception for sugar to reflect new tariff nomenclature and the expansion of this exception to include sugar-containing products,
  2. maintaining exceptions to the limitation on drawback for certain goods traded between the parties

MPF – maintaining the waiver of the merchandise processing fee with respect to originating goods and extending that waiver to trade preference level goods

Rules of Origin

  1. making significant changes to the rules of origin for automotive goods, including ending NAFTA’s tracing and deemed originating requirements, increasing the regional value content, requiring that certain core vehicle parts be originating for a vehicle to be originating, and creating a new labor value content rule;
  2. updating rules of origin for optical fiber and certain steel, glass, titanium, and chemical products;
  3. introducing new customs procedures such as allowing importers as well as exporters and producers to make certifications of origin;
  4. revising penalty provisions;
  5. providing one year after importation to claim preferential tariff treatment
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