U.S. Trade Representative Katherine Tai highlighted recently the trade enforcement actions the U.S. is taking under the U.S.-Mexico-Canada Agreement but some U.S. lawmakers are pushing for more, raising the possibility of new trade restrictions among the three neighboring countries.

In the last few weeks the U.S. advanced a USMCA dispute over Canada’s dairy tariff-rate quota policies and threatened a USMCA proceeding over Mexico’s restrictions on imports of genetically-engineered corn.

These are the latest in a series of enforcement actions the U.S. has taken under the USMCA, USTR states. In July 2022 the U.S. requested USMCA dispute settlement consultations over energy measures that favor Mexico’s state-owned electrical utility and state-owned oil and gas company. In February 2022 the U.S. launched consultations under the USMCA environment chapter regarding Mexico’s obligations to effectively enforce its fisheries-related laws, regulations, and other measures designed to prevent illegal, unreported, and unregulated fishing. Discussions in both cases are still ongoing.

USTR adds that the U.S. has initiated the USMCA’s facility-specific rapid response labor mechanism against Mexico six times, each of which “resulted in outcomes that are producing important, concrete results for workers.” The U.S. has also requested Mexico’s cooperation under the bilateral Environment Cooperation and Customs Verification Agreement, resulting in Mexico agreeing to joint work on environmental enforcement matters.  

However, some lawmakers are pushing USTR to do even more. Senate Finance Chairman Ron Wyden, D-Ore., and Ranking Member Mike Crapo, R-Idaho, said in a Jan. 26 letter to Tai that while they applaud the progress noted above USTR must continue its efforts to address these issues as soon as possible. They also asserted that Canada and Mexico “continue to ignore many other critical USMCA obligations” in the following areas, which requires “a forceful and timely response from USTR.”

- Mexico’s export tariff on white corn

- Canada’s milk pricing and export surcharges

- Mexico’s recognition of certain common cheese names and new conformity assessment requirements for imported dairy products

- Canada’s digital services tax “that is targeted at U.S. employers”

- Canada’s Online Streaming Act, which would mandate preferential treatment for Canadian content

- Canada’s Online News Act, which would require the largest social media platforms to bargain with Canadian news organizations and pay for the right to display news stories, headlines, snippets, and links

- forced labor in the production of certain tomatoes from Mexico that have been banned from importation into the U.S. pursuant to a withhold release order

Sen. Tammy Baldwin, D-Wis., sent Tai a similar letter Jan. 30 focusing on the dispute over Canada’s dairy policies.

The letters highlight the dispute settlement mechanism included in the USMCA that the U.S. has made liberal use of to seek compliance with the agreement’s terms for the benefit of U.S. companies and workers. By contrast, there is some question as to whether the Indo-Pacific Economic Framework, the Americas Partnership for Economic Prosperity, and other new-style trade agreements the Biden administration is negotiating will have mechanisms by which the U.S. can enforce the commitments partner countries make.

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