Ahead of a joint review of the U.S.-Mexico-Canada Agreement slated for July 1, U.S. Trade Representative Jamieson Greer told the House Ways and Means and Senate Finance committees recently that USTR will not “rubberstamp” the extension of that agreement and will only recommend extending it if specified issues can be resolved.
Greer said the USMCA “has been successful to a certain degree” and “has provided some certainty for North American trade.” However, he added, “it is clear that we have not achieved all of our goals with respect to strengthening U.S. manufacturing capacity and creating good jobs.” Greer cited specific shortcomings, such as budget shortfalls in Mexico’s electronic single window program to facilitate customs and Canadian measures that restrict digital services trade, as well as structural shortcomings, including continued high U.S. goods trade deficits, harmful changes in Mexico’s business climate, and the USMCA’s inability to address “the surge of investment from companies domiciled in non-market economies in the region or the effects of industrial overcapacity on the three economies.”
The written and oral comments USTR received from stakeholders in recent months expressed similar views, Greer said. Many indicated support for the USMCA, highlighted the benefits it provides, and called for it to be extended. However, “virtually all stakeholders” also urged various improvements.
Greer concluded that USMCA’s shortcomings “are such that a rubberstamp of the Agreement is not in the national interest.” In response, USTR will “keep the President’s options open, negotiating firmly to resolve the issues identified, but only recommending renewal if resolution can be achieved” on those issues, which include the following.
Mexico
- restrictions on Mexican customs brokers that raise costs for U.S. exports
- policies that promote the use of third-country content and erode U.S. supply chains
- the impact of imports of Mexican seasonal produce on U.S. growers
- improvements to labor law enforcement
- improvements to environmental law enforcement, including with respect to illegal fishing and illegal wildlife trade
- unfair granting of protection for numerous meat and cheese terms to the European Union
- equal treatment for U.S. electronic payment service suppliers
Canada
- complicated customs registration for Canadian recipients of U.S. exports
- market access for U.S. dairy products that Canada committed to provide under the USMCA
- the impact of Canada’s online streaming and online news acts for U.S. digital service providers
- provincial bans on the distribution of U.S. alcohol beverages
Both Countries
- strengthening rules of origin for non-automotive industrial goods
- enhancing economic security alignment on tariffs, export controls, and investment screening
- improving implementation of forced labor import bans
- developing mechanisms to penalize offshoring of U.S. production to Mexico or Canada as the result of regulatory and other arbitrages
- developing a critical minerals marketplace to incentivize more mining, processing, recycling, reuse, and manufacturing of critical minerals and derivatives products in the region
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