Global Affairs Canada released a “statement of implementation” for the USMCA, or CUSMA, as it is known in Canada, in the Aug. 22 Canada Gazette, Part I. The statement is meant “to explain the basic rights and obligations in the Agreement so that Canadians have a clearer understanding of the substance and benefits,” GAC said. “It also clearly sets out how Canada interprets the Agreement and intends to pursue the rights and obligations contained therein.”
More companies are seeking drawback payments as the economic slowdown has increased the importance of cash on hand, CBP officials and industry executives said during the American Association of Exporters and Importers virtual conference Aug. 20. “In general, I would say COVID's had a major impact on our businesses and it's also made our company even more focused on getting cash in the door,” said Kathleen Palma, senior executive for international trade compliance at GE. “One of the levers that our leadership has been looking at has been drawback.” At the same time, Palma expects that because the company is bringing in fewer shipments, that will be reflected in fewer drawback claims going forward.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said Taiwan's an attractive free trading partner but not as important to exporters as China is. “I'm for a free trade agreement with Taiwan, but I wouldn't want that to stand in the way of a phase two deal with China,” he told reporters on a conference call Aug. 17. China sees Taiwan as a breakaway province, and considers it part of China, not an independent country. Taiwan's president recently said he'd like negotiations to begin on an FTA (see 2008130010), and 161 House members have argued for opening negotiations with Taiwan (see 1912200014).
As Canadians consider which of 68 aluminum-containing products to put on a tariff retaliation list, U.S. industrial producers and buyers of aluminum reacted with dismay to the news that a large segment of Canadian aluminum imports will face a 10% tariff starting Aug. 16.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said the technical fixes to USMCA need to be done, and he hopes a technical fixes bill can pass the Senate by unanimous consent. The bill would allow refunds of merchandise processing fees in post-entry reconciliation (see 2007070056) and may also change treatment of foreign-trade zones, a change that those zones say is not a technical fix at all, but a policy change (see 2007200021).
Michael Nemelka, the nominee for deputy U.S. trade representative, said that the first case under USMCA could begin in the fall, if consultations with Canada or Mexico fail. Nemelka, who currently works as a special adviser to the USTR, said that they are reviewing complaints this month. After that, staff will consult with the congressional committees of jurisdiction about which complaints would make the best cases. Then a consultation process would begin.
House Ways and Means Committee ranking member Kevin Brady, R-Texas, one of the four players directing the shape of a USMCA technical corrections bill, said that the “language was a little different than the intent” when it came to the treatment of foreign-trade zones in USMCA's implementing bill. Brady and the leaders of the Ways and Means and Senate Finance committees see getting a technical corrections bill passed as “a high priority,” he said in a recent interview.
Some new provisions within the USMCA seem to make claims of U.S. goods returned under Harmonized Tariff Schedule heading 9801 for U.S. origin goods much less important than was the case under NAFTA. Kevin Riddell, director-trade and regulatory compliance at Tremco Group in Canada, highlighted the changes, which allow for USMCA claims on U.S. origin goods, in a recent LinkedIn post. While Riddell said he hadn't tried to enter U.S. goods under the new USMCA provisions, a CBP spokesperson confirmed that “a USMCA claim may be made on goods of U.S. origin, provided it satisfies its applicable rule of origin and all other requirements of the Agreement have been met.”
Export Compliance Daily is providing readers with some of the top stories for July 6-10 in case you missed them.
The Alliance for Trade Enforcement is asking U.S. Trade Representative Robert Lighthizer to bring up intellectual property and agriculture issues with Mexico and Canada in the USMCA. The alliance includes trade groups in pharmaceutical, biotech and creative industries and the National Association of Manufacturers, in addition to broad trade groups such as the National Foreign Trade Council and the U.S. Council for International Business.