Export Compliance Daily is providing readers with some of the top stories for May 11-15 in case you missed them.
Many details needed for the uniform regulations and the final implementing instructions for the U.S.-Mexico-Canada Agreement remain under discussion, agency officials said on May 14. Many specifics have not been agreed to, either between Mexico, Canada and the U.S., between the Office of the U.S. Trade Representative and the auto industry, or between CBP and USTR. “There's still even discussions with USTR and the [auto] industry on what constitutes a core part,” Maya Kumar, director for textiles and trade agreements, told members of the trade community on a conference call.
CBP is using a new center focused on implementation of the U.S.-Mexico-Canada Agreement to help with the process, the agency said in a May 11 news release. “Staffed with CBP experts from operational, legal, and audit disciplines, as well as with virtual representatives from Canadian and Mexican customs authorities, the USMCA Center is a cornerstone of CBP’s USMCA implementation plan and will serve as a central communication hub for CBP and the private sector community, including traders, brokers, freight forwarders and producers, ensuring a smooth and efficient transition from the North American Free Trade Agreement to USMCA,” it said.
The Office of the U.S. Trade Representative is disinclined to offer an informed compliance period for most importers, “because most of the rules of origin have remained essentially the same” as what was in NAFTA, so CBP can honor the U.S.-Mexico-Canada Agreement claims with the same information that backed NAFTA claims, according to Brenda Smith, executive assistant commissioner of CBP’s Office of Trade.
At the southern border, not every document can be processed electronically yet, but they're working on it, the CBP Laredo Field Office told traders on a conference call May 1. Documents including meat certificates, phytosanitary certificates, bovine paperwork, and CITES certificates are still needed in paper form. Assistant Director of Field Operations Armando Taboada asked those listening to make sure the drivers and runners coming to the Texas port wear masks. “I know Gov. [Greg] Abbott relaxed a little bit of the requirements,” he said, but added, “It’s for our own health and safety, for all of us.” He said most drivers are wearing masks, but there are a few stragglers.
Although the auto industry appears to have lost the fight to delay a switchover from NAFTA to the U.S.-Mexico-Canada Agreement, an executive at the organization that represents parts suppliers said they now hope that with give-and-take on the implementing rules and perhaps some flexibility, the industry will be able to make a July 1 entry into force date work.
U.S. Trade Representative Robert Lighthizer notified Congress April 24 that the United States–Mexico–Canada Agreement will enter into force on July 1, 2020. Following that notification to Congress, the U.S. certified to Mexico and Canada that it's ready for the NAFTA replacement to take effect.
The Office of the U.S. Trade Representative issued a pre-publication notice April 20 that carmakers must submit draft staging plans under the U.S.-Mexico-Canada Agreement no later than July 1. Their final plans are due by Aug. 31, the notice said. If USTR approves the plans, companies would have five years instead of three to increase regional content and adjust to other changes in the auto rules of origin. In order to be approved, the companies must show how every model can meet the stricter standards, even if that can't be done within the five-year time frame. Many cars imported from Mexico do not meet the current standards and pay the 2.5% duty. “The petitioner also should identify any North American investments and sourcing, preferably by calendar year and location, which will allow such vehicles to meet the standard USMCA rules,” USTR said.
Braumiller Law Group attorneys told webinar listeners April 20 that outside of the automotive sector, the U.S.-Mexico-Canada Agreement has more liberal rules of origin than NAFTA. Jim Holbein said that the decision on whether a product qualifies based on tariff shift is a “much simpler rule to apply. I believe that’ll be useful, particularly if your process for obtaining origin is based all on NAFTA.” He gave the example of a flat-screen TV assembled in Mexico, which currently has content percentage rules. Under USMCA, if the manufacturing process qualifies as substantial transformation, that's enough to count as Mexican.
CBP posted interim implementation instructions for the U.S.-Mexico-Canada Agreement to provide "guidance with respect to preferential tariff claims under the USMCA," it said. The document covers many of the USMCA provisions, including making preference claims, rules of origin for automotive goods and country of origin marking rules. "The procedures outlined in this memorandum are in place pending the issuance of the applicable regulations," CBP said.