The Senate Finance Committee's attempt to give Congress more of a say on how Section 232 tariffs or quotas are applied is stalled again. Chairman Chuck Grassley, R-Iowa, when he was speaking with reporters a week ago, said a markup of a bill along those lines could happen in November if he could find a compromise that could pass out of committee. The chairman's deadline for introducing a bill has slipped repeatedly through the year (see 1908070058 and 1906130033).
USMCA
The U.S.-Mexico-Canada agreement is a free trade agreement between the three countries, also known as CUSMA in Canada and T-MEC in Mexico. Replacing the North American Free Trade Agreement (NAFTA) in 2020, the agreement contains a unique sunset provision where, after six years (in 2026), any of the three parties may decide not to continue the agreement in its current form and begin a period of up to 10 years where USMCA provisions may be renegotiated.
House Ways and Means Committee Chairman Richard Neal, D-Mass., sounded a little less optimistic about the Democrat working group reaching a conclusion on the new NAFTA than he has recently, even as he told reporters “we made some advances today" in a meeting with U.S. Trade Representative Robert Lighthizer Oct 30. "The differences continue to narrow." He also said both sides are exhausted.
The idea that the U.S. might lower de minimis for Canadian and Mexican shipments, because those countries did not raise their thresholds as much as the U.S. wanted, is not going to be part of the NAFTA rewrite, Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said Oct. 29.
President Donald Trump, speaking at a fracking conference in Pennsylvania, first said that Democrats don't want to put the NAFTA rewrite up for a vote, then said, "But I think they're going to put it up because everybody wants it, and I think ultimately, they're going to do the right thing."
USMCA Working Group Members' Mood After Meeting Diverges; Caucus Is Hearing Biologics Solution Found
Some members of the Democrat working group tasked with getting edits to the new NAFTA said it's going well after the latest meeting, but others emphasized how delicate it is, and how parsing the words is essential to satisfying Democrats' concerns with the deal.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, one of the few Republicans in Washington who has not criticized House Democrats for spending months negotiating for changes to the U.S.-Mexico-Canada Agreement, told reporters Oct. 22 he recently started to worry about time running out.
House Trade Subcommittee Chairman Earl Blumenauer, D-Ore., a member of the working group working to get changes to the new NAFTA to suit Democrats, said "there's been some hiccups" in negotiations with the administration, but a deal is achievable if the administration wants it. "Everybody's trying to figure out how to do it," he said. And, given the amount of staff work, and the pace of meetings -- two this week with U.S. Trade Representative Robert Lighthizer -- if the Democrats and USTR don't reach agreement "it's not going to be for lack of effort."
House Speaker Nancy Pelosi said she's optimistic the administration and trading partners will be able to reach agreement on enforceability that will allow the House to proceed with a vote. Pelosi, speaking at a press conference Oct. 17, said the working group is "making progress every day." She also said that the agreement has to be respectful of global agreements on the environment, and she hopes the provisions on biologics can be resolved to the satisfaction of Democrats. "That's a very big issue in our caucus," she said.
About 350 companies, trade associations and local manufacturing groups and chambers of commerce are urging Congress to ratify the United States-Mexico-Canada Agreement "as soon as possible this autumn." The letter, led by the National Association of Manufacturers and signed by giants like Ford, GM, Fiat Chrysler, Caterpillar, IBM, GE, Honeywell, Bayer and Bristol-Myers Squibb, was sent Oct. 15. It said that ratification "is essential to promoting certainty and growth for manufacturing businesses." Volvo North America and Mahindra Automotive America signed the letter, but BMW and Mercedes -- whose supply chains would likely have to change to meet stricter rules of origin -- did not. The letter referred to trade facilitation -- though not explicitly higher de minimis levels in Canada and Mexico, in saying that the USMCA will eliminate red tape at the border, and make "it easier for small and medium-sized businesses to sell into these critical markets."
House Ways and Means Committee Chairman Richard Neal, D-Mass., said Mexico has made "another significant step forward" by promising to fully fund new labor courts that will be integral to major labor reform in that country. Neal said he, fellow working group member Rep. Jimmy Gomez, D-Calif., and committee member Rep. Bill Pascrell, D-N.J., met with the Mexican president for an hour and 45 minutes during the recess, an hour longer than scheduled.