USMCA (fka NAFTA)

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On August 31, 2018, President Donald Trump officially notified Congress of his administration’s intent “to enter into a trade agreement with Mexico — and with Canada if it is willing, in a timely manner, to meet the high standards for free, fair, and reciprocal trade contained therein.” Notification was necessary under the provisions of the Trade Promotion Authority (TPA) legislation, which allows “fast track” consideration of trade agreements (i.e., Congress can vote to approve or reject a trade deal but cannot amend the text of the agreement). In the wake of the president’s notification, U.S. Trade Representative Robert Lighthizer indicated that a resulting free trade agreement could either be bilateral (with Mexico) or trilateral (with Canada also), depending upon the final negotiated text of any agreement. It has been questioned, however, whether a bilateral agreement fulfills TPA requirements since Congress had been earlier notified of the Trump administration’s intent to renegotiate a trilateral North American Free Trade Agreement (NAFTA). If Congress believes that a free trade agreement with only Mexico does not qualify for TPA consideration, amendments could be offered by Congress, potentially complicating any final agreement. With Congressional notification under the TPA, the actual text of any agreement must be submitted to Congress within the next 30 days for its consideration.

On August 27, 2018, the United States and Mexico reached a preliminary agreement “in principle, subject to finalization and implementation,” to update the North American Free Trade Agreement (NAFTA). The Office of the U.S. Trade Representative (USTR) stated that the updated agreement will “support mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America.” In reaching the agreement with Mexico, President Trump stated that, “America has … finally turned the page on decades of unfair trade deals that sacrificed our prosperity and shipped away our companies, our jobs, and our Nation’s wealth.”

Key Notes:

  • On May 23, 2018, the Department of Commerce self initiated a Section 232 national security investigation concerning the imports of automobiles and automotive parts.
  • A formal docket has been opened for the submission of public comments and requests to appear at a public hearing July 19-20, 2018.
  • The Department of Commerce has 270

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Top trade officials from the United States, Canada and Mexico will resume negotiations over revisions to NAFTA this week in an effort to finalize an agreement. Reports indicate that while progress has been made, a number of issues remain, including rules of origin pertaining to automobiles, dispute settlement, government procurement and labor.

All parties agree…

The Office of the U.S. Trade Representative (USTR) has released its annual report on significant foreign trade barriers, providing an inventory of the most important foreign barriers affecting U.S. exports of goods and services, foreign direct investment by U.S. persons and protection of intellectual property rights. The term “trade barriers” does not have a fixed definition but is broadly defined by the USTR as government laws, regulations, policies or practices that either protect domestic goods and services from foreign competition, artificially stimulate exports of particular domestic goods and services, or fail to provide adequate and effective protection of intellectual property rights. The report classifies foreign trade barriers into 10 different categories, including import policies, government procurement, export subsidies, lack of intellectual property protections and service/investment barriers.

On the eve of the State of the Union, 35 Republican Senators sent a letter to President Trump reaffirming their belief in the benefits of the North American Free Trade Agreement (NAFTA). They urged the president to keep NAFTA in place but supported efforts to modernize the trade agreement. Overall, the letter extols the value…

While the sixth round of negotiations among trade officials from Canada, Mexico and the United States proceeded in Montreal last week on the North American Free Trade Agreement (NAFTA), the nonpartisan Business Roundtable released an economic analysis concluding that termination of NAFTA would have a significant net negative impact on the U.S. economy and employment.…

Upon the conclusion of the fifth round of renegotiations of the North American Free Trade Agreement (NAFTA), U.S. Trade Representative Robert Lighthizer issued the following statement:

“While we have made progress on some of our efforts to modernize NAFTA, I remain concerned about the lack of headway. Thus far, we have seen no evidence that…

The Office of the U.S. Trade Representative (USTR) has released an updated summary of U.S. objectives for the renegotiation of the North American Free Trade Agreement (NAFTA). The new objectives update the previous objectives published in July (see our July 18, 2017 update), and come after four rounds of negotiations among the United States,…

After four rounds of negotiations, the United States, Canada and Mexico are beginning to express frustration concerning the discussions and proposals to revise and update the North American Free Trade Agreement (NAFTA). In an October 17 joint statement, the parties indicated that they have put forward “substantially all initial text proposals” but that these…