USMCA

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On Monday, April 20, 2020, U.S. Customs and Border Protection (CBP) issued interim instructions for implementation of the U.S.-Mexico-Canada Agreement (USMCA).*  The instructions provide guidance regarding preferential tariff claims under the USMCA.  The Agreement, once it enters into force, provides for the immediate or staged elimination of trade barriers for goods originating in one of the three countries.  The instructions provide guidance regarding rules of origin (including for automotive goods), regional value content (RCV) calculation methods, de minimis rules, transshipment, eligibility for textiles and apparel, making preference claims, and certification and recordkeeping rules and requirements.

The instructions provide a rules of origin definition to determine whether a good qualifies as an “originating good” under the USMCA, such that it is eligible for preferential tariff treatment.  Under USMCA a good is “originating” in the United States, Mexico, or Canada when:

a) The good is wholly obtained or produced entirely in the territory of one or more of the Parties, as defined in Article 4.3 of the Agreement;

b) The good is produced entirely in the territory of one or more of the Parties using non-originating materials provided the good satisfies all applicable requirements of product- specific rules of origin;

c) The good is produced entirely in the territory of one or more of the Parties exclusively from originating materials; or…
Continue Reading CBP Posts Interim Instructions for USMCA Implementation

On December 10, the U.S., Mexican, and Canadian governments signed an updated United States-Mexico-Canada Agreement (“USMCA”) in Mexico City.  The new agreement comes on the heels of months of additional negotiations between the three governments after an original deal was reached last year.  The terms of the new deal respond to criticism that the agreement…

On Friday, May 17th, the Trump Administration announced that it has reached a deal with Canada and Mexico to eliminate national security-focused Section 232 tariffs on steel and aluminum (at 25 percent and 10 percent, respectively) from Canada and Mexico.  According to a joint statement by the United States and Canada, US.…

On Friday, May 17, President Donald J. Trump issued a proclamation directing the United States Trade Representative (USTR) to negotiate trade agreements to address the national security threat posed by imports of foreign automobiles and certain automotive parts. The proclamation provides for 180 days of negotiations, delaying the decision on whether to impose import restrictions…

On January 29, USTR Ambassador Lighthizer delivered to Congress a list describing changes to U.S. laws that would be required to fulfill obligations agreed to under the United States Mexico Canada Agreement (USMCA).  This action, taken in accordance with procedures set forth in the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (also known as Trade Promotion Authority or TPA), brings the agreement one step closer to Congressional consideration by identifying the legal changes that must be included in an implementing bill to be voted on by legislators to approve the underlying agreement.

The changes in existing law are largely customs related, the bulk of which involve implementing market access commitments, including lowering tariffs and creating new tariff rate quotas, as well as updating provisions related to duty drawback, merchandise processing fees and customs enforcement.  For example, while USMCA preserves duty free treatment for industrial goods and textiles under NAFTA, the United States and Canada negotiated additional access on certain agricultural products.  Accordingly, modifications must be made to eliminate U.S. tariffs on such products from Canada, including dairy, sugar, sugar-containing products, peanuts and peanut products and cotton.

Changes are also required to implement rules of origin, origin procedures and customs measures to provide preferential tariff treatment for eligible goods.  The most significant and notable changes involve automotive goods.  Necessary legal revisions will end NAFTA’s tracing and “deemed originating” requirements and increase the required regional value content for vehicles and vehicle parts.  Changes are also needed to implement a new “Labor Value Content” rule, which for the first time requires that a minimum amount of car content …
Continue Reading USTR Announces List of Changes Required to U.S. Law in Order to Implement USCMA