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USMCA Legislation Approved in Senate, Could Become Law Next Week

Friday, January 17, 2020
Sandler, Travis & Rosenberg Trade Report

The Senate approved Jan. 16 by an 89-10 vote legislation to implement the U.S.-Mexico-Canada Agreement updating NAFTA. President Trump said he plans to sign the bill, which the House of Representatives previously passed by a 385-41 vote, during the week of Jan. 20.

Canada has yet to ratify the USMCA and Mexico must still approve recent revisions made by the U.S. As a result, the agreement is not likely to take effect until mid-2020 at the earliest. The Trump administration states that it plans to amend or issue federal regulations required to implement U.S. obligations under the agreement at the time it enters into force.

For more information on the USMCA, please contact trade consultant Nicole Bivens Collinson at (202) 730-4956. For details on specific aspects of the agreement, register to attend one of ST&R’s in-depth seminars. Click here and here for more information on the changes made by USMCA.

A White House statement of administrative action on this legislation states that while the USMCA is a comprehensive overhaul of NAFTA, it replicates many provisions of that agreement without change; e.g., duty-free treatment for industrial goods and textiles, temporary entry for business persons, and review and dispute settlement in antidumping and countervailing duty matters. Other provisions have been reproduced with minimal changes, including those on duty drawback, the merchandise processing fee, origin procedures, and customs measures.

However, the statement adds, the USMCA updates many disciplines and adds disciplines in areas not covered by NAFTA. For example, labor and environment chapters are included as integral parts of the agreement rather than as separate supplemental agreements, and there are new provisions on digital trade and state-owned enterprises. The USMCA also contains significant changes to the rules of origin for automotive goods, as well as changes to the rules for other products, to reflect the structure of current supply chains and incentivize additional production in the North American region.

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