U.S. trade rep says USMCA will go into effect July 1

The U.S. trade representative said the United States-Mexico-Canada Agreement was set to be implemented as scheduled, even though dozens of Congress members have urged him to delay the trade agreement amid the COVID-19 pandemic.

On April 24, U.S. Trade Representative Robert Lighthizer broke his silence regarding the implementation of USMCA, the trade pact succeeding the North American Free Trade Agreement. In a statement, Lighthizer said that USMCA will enter into force July 1.

Lighthizer notified Congress on April 24 that Canada and Mexico had done their parts in ensuring compliance with their respective commitments. Following that notification, the United States became the third country to notify the other two countries that it has completed its domestic procedures to implement the agreement, according to a USTR statement. That completed all steps required to launch enforcement of USMCA.

However, many in Congress believe that July is too soon to implement USMCA. In a letter dated March 30, 19 members of the Senate Finance Committee urged Lighthizer to delay the launch date. The letter states that COVID-19’s global disruption has left little time and resources to prepare for a smooth transition.

“A long experience of incomplete and inadequate implementation by trade agreement partners has taught us that the United States must do this work on the front end to ensure that the words on paper deliver genuine benefits to Americans, including our farmers, workers and businesses,” the letter stated. “We urge you to seriously reconsider the proposed July 1 entry into force of USMCA, particularly in light of the significant public health crisis and supply chain disruptions caused by COVID-19.”

During a media briefing on April 9, President Donald Trump signaled that he will continue with USMCA as signed.

“Obviously the deal is different from the standpoint that production will be lower, but we have a deal,” Trump said. “It’s a signed deal.”

Subsequently, 31 members of the U.S. House of Representatives sent a letter to Lighthizer requesting flexibility of USMCA’s rules of origin requirements for automotive manufacturers.

“This targeted extension is necessary to allow the auto industry an appropriate adjustment period and account for delays caused by the COVID-19 pandemic,” the letter stated. “Alternatively, we ask that you seriously consider other accommodations or flexibilities that will allow the automotive sector to avoid being penalized by the new requirements upon the agreement’s entry into force.”

Contrary to those concerns, Lighthizer suggested that the current pandemic is a good reason to keep USMCA on schedule.

“The crisis and recovery from the COVID-19 pandemic demonstrates that now, more than ever, the United States should strive to increase manufacturing capacity and investment in North America,” Lighthizer said in a statement. “The USMCA’s entry into force is a landmark achievement in that effort. Under President Trump’s leadership, USTR will continue working to ensure a smooth implementation of the USMCA so that American workers and businesses can enjoy the benefits of the new agreement.”

On April 28, Trump signed an executive order establishing the Interagency Labor Committee for Monitoring and Enforcement. The committee will monitor the implementation and maintenance of the labor obligations of Canada and Mexico, monitor the implementation and maintenance of Mexico’s labor reform, and recommend enforcement actions with respect to Canada or Mexico.

Cross-border trucking regulations will not be among the priorities for the committee. A separate provision in the trade agreement allows a representative of a U.S. long-haul trucking services industry, the U.S. trade representative, a congressional committee or the president to request an investigation to determine whether an existing Mexican carrier or one seeking approval is causing or threatens to cause material harm to a United States long-haul trucking services industry. LL