Trade Cases

USMCA Implementation Not Likely Before July
Written by Sandy Williams
April 9, 2020
Implementation of the U.S.-Mexico-Canada Agreement, the replacement for NAFTA, is now likely to occur July 1, possibly with portions of the agreement subject to a transition period.
Canada and Mexico have completed their entry-into-force notifications and the U.S. is expected to submit its notice soon. Procedure rules dictate that the agreement will go into effect three months after the last country submits its notification. The July 1 date is a month later than the Trump administration had hoped, but attempts at moving the date to June 1 were met with pushback from concerned parties.
Auto industry groups have requested more time to comply with the new rules-of-origin measures in the USMCA. The COVID-19 crisis has complicated the issue by causing the shutdown of automotive plants in North America as well as refocusing government attention from the agreement to fighting the pandemic.
The president of the Mexican auto industry says that it will take more than 90 days to make supply chain adaptations to meet the new origin requirements. Director Fausto Cuevas has asked for rules-of-origin implementation to be delayed until January 2021.
Mexican Undersecretary for Foreign Trade Luz María de la Mora said he could see a scenario where the agreement enters into force with a transition period allowed for the automotive sector.
“We have put this issue on the table many times, but unfortunately this is not a Mexican decision. This is a trilateral decision,” said de la Mora. “If there were to be flexibility on the part of the U.S. and Canada, we’re more than happy to do that.”
Rep. Debbie Dingell (D-MI) and Senate Finance Committee Chairman Chuck Grassley have urged the U.S. Trade Representative to delay the entry-into-force.
“We, a lot of people on my committee, see that [early date] as being a major problem, particularly for the supply chain for automobiles, and we’re asking for a later starting date,” Grassley told reporters on a conference call. “And I think that Lighthizer believes he doesn’t have leverage if he delays it, particularly on agriculture…. [But] we haven’t heard those sorts of concerns from agriculture.”
During a webinar on Monday focusing on trade during the COVID-19 emergency, Dingell said a delay of USMCA is necessary.
“We are — and I can’t believe that I myself am saying this — probably going to have to postpone some of the implementation of the NAFTA 2.0 because we have devastated the supplier base, but we can’t do it for a long period of time,” she said.

Sandy Williams
Read more from Sandy WilliamsLatest in Trade Cases

Leibowitz: Renewed trade war with China over rare earths
On Oct.10, President Trump announced major increases in tariffs on Chinese goods. The trigger was a new regime of export controls on rare earth metals and products using those elements, including magnets, capital equipment, and catalysts for catalytic converters in cars and trucks.

Industry piles on new Section 232 steel derivative inclusion requests
The Department of Commerce received 97 submissions from producers, manufacturers, and groups seeking Section 232 tariff coverage for steel and aluminum derivative products.

Price on Trade: New EU steel tariffs don’t mean the US should weaken its stance
Any steel imports into the EU that exceed the new, lower quota level would be subject to a 50% tariff, which represents a major increase from the EU’s current 25% out-of-quota tariff. This move would largely align the EU’s steel tariff rate with Canada and the United States.

Global steel forum sets 2026 framework deadline as US ups pressure on excess capacity
Global steelmakers sounded the alarm Friday over the deepening excess steelmaking capacity crisis. Ministers at the Global Forum on Steel Excess Capacity (GFSEC) in Gqeberha, South Africa, pledged to...

CRU: China’s indirect steel exports find new destination markets
The boom in China’s direct steel exports has not stopped this year, even with a rise in protectionist measures globally. The increase is driven by...