New NAFTA Customs Chapter Includes More Guidance for Trade, Trilateral Customs Committee
The lead negotiator for Mexico in the NAFTA Customs and Trade Facilitation Chapter said much progress has been made, and that governments will elevate many practices to the treaty level and add others. Jose Martin Garcia, representative of the Mexican Finance Ministry and Customs Administration at the Mexican Embassy in Washington, spoke about how an updated NAFTA would benefit cross-border trade during a June 13 panel discussion at the Wilson Center. "We're trying to create a new concept of guidance, something more expeditious," he said, in addition to publicizing advance rulings. The chapter would implement inquiry boards, he said, whereby traders can ask questions about customs rules. Mexico, the U.S. and Canada want to create "transparency and uniformity of treatment for all traders," he said.
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No matter how long it takes to renegotiate NAFTA -- though he is optimistic it will be renewed -- Martin Garcia said Mexico's customs agency and CBP will continue to work on closer cooperation to facilitate the more efficient flow of goods while also securing the supply chain. He said that CBP already does joint risk management and targeting at Mexico's seaports on the Pacific, where Asian drug manufacturers send drugs intended for illicit sale, or send precursor chemicals for methamphetamine. He said there was $2.7 billion worth of chemicals and drugs seized at those ports last year.
He also talked about the expansion of unified cargo processing, which is a merger of cargo pre-inspection and joint inspection at the facilities of the importing country. The UCP is operating at 10 locations, he said, but is not as expansive at every port of entry. At some ports, all shipments are processed with UCP. At another, only Authorized Economic Operators/CTPAT-certified traders get that treatment. At others, only certain industrial sectors go through UCP, he said. "I would say we are still going through these learning processes," he said. "We are developing criteria for the expansion of the program. Our next steps would depend on the success of these pilots." He said that Canada is also discussing beginning a UCP program with the U.S.
The Customs Chapter would also create a mechanism for permanent dialogue with the trade community, he said, which is also something Mexico needs to do to fulfill its obligations under the global Trade Facilitation Agreement. It would create a trilateral customs committee, as well as a new customs enforcement committee. "We have a lot of abuse on falsification of origin," he said, and that enforcement committee could help address it.
Panelist Jose Antonio Vidales, former president of the Mexican Confederation of Associations of Custom Agents, said granting mutual recognition between the Mexican and U.S. trusted trader programs is necessary for streamlining processes. Martin Garcia said mutual recognition exists -- it was achieved in 2013 -- but said, "We need to make this something real in life." Fellow panelist Bernardo Ayala, vice president of the Mexican branch of Union Pacific Railroad, said he sees the failure of mutual recognition at his company. For goods coming into the U.S. from Mexico, a new business will have its shipments stopped once or twice for inspection, but from then on, they clear. He said, "Southbound, you usually get targeted every time." He said that statistics show that 1 percent of freight from Mexico to the U.S. is stopped while 10 percent of shipments from the U.S. to Mexico are targeted.