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U.S., Canada, Mexico to Liberalize Rules of Origin, Pursue Other Initiatives

Friday, July 08, 2016
Sandler, Travis & Rosenberg Trade Report

At a recent summit, the leaders of the U.S., Canada and Mexico announced a number of initiatives to enhance North America’s economic competitiveness; expand joint efforts on climate change, clean energy and the environment; solidify regional and global cooperation; and strengthen security and defense.

Rules of Origin. The leaders reportedly agreed on a fourth round of liberalization of the NAFTA rules of origin covering goods representing about $128 billion in trilateral trade per year, including pharmaceuticals, cosmetics, rubber, metals, industrial and electrical machinery, precision instruments and natural gas.

Border Issues. Later this year Canada will, on a pilot basis, embed personnel into a U.S. customs center in which Mexican custom personnel are currently embedded to establish a foundation for joint contraband threat identification and examination activities.

As the three countries each advance their national single online portals where businesses can submit information required to comply with border regulations, they commit to align processes and requirements to the greatest extent possible. To support this approach, all three will undertake a joint study to prioritize and propose implementation strategies and to determine if trilateral alignment is possible. They will also explore other options to increase dialogue on border-related issues, including strengthening intergovernmental partnerships, supporting coordinated border management, and providing a platform for private sector engagement.


Economic Competitiveness. A newly launched North American Competitiveness Work Plan includes 14 new initiatives that will reduce costs for business, improve supply chain efficiency, advance innovation and economic development, and engaging stakeholders through consultation and outreach. The first annual Stakeholder Dialogue on North American Competitiveness will be held this fall in Washington to provide private sector, local government, labor and civil society representatives an opportunity to contribute ideas.

The leaders committed to establish a North American cluster map showing clusters of interconnected companies, suppliers and institutions, which will allow individuals, businesses and local governments to understand the strengths of their regions, identify investment and trade opportunities, and plan strategies to build and attract new industries.

Softwood Lumber. In a separate statement, the U.S. and Canada said that despite making “important progress” in negotiations on a new softwood lumber trade agreement, “significant differences remain regarding the parameters of the key features” of the agreement. The two sides intend to maintain “an intensive pace of engagement” in hopes of reaching a deal ahead of the Oct. 12 expiration of a “standstill” period during which the U.S. has agreed not to        impose antidumping or countervailing duties on imports of softwood lumber from Canada.

Steel. Recognizing the negative impact that excess production has on companies, workers and trade in North America, the three countries will initiate a trilateral customs steel enforcement dialogue to facilitate coordinated compliance efforts and information sharing regarding border enforcement of antidumping and countervailing measures on steel products.

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