Breakfast Series Session Attendees:

The past few weeks on the trade front have been like riding the American Eagle roller coaster at Six Flags Great America. Ups and downs. Twists and turns.

However, aside from the fluctuations, what of any substance has taken place since we last reported?

• The USITC economic study of USMCA, originally scheduled to be released in mid-March, is now scheduled for this Friday, April 19; however, there have not been any updates on this recently.
• The DOC 232 investigation of autos and auto parts, scheduled to be released in mid-February, was released confidentially to the White House on February 17; little has been leaked. The President has 90 days to decide what to do with the results but, in the meantime, has threatened to impose 25% tariffs on auto and auto part imports from Mexico if it does not halt the flow of illegal drugs within a year.
• The 90-day “cooling down period” in the U.S.-China trade war, which was supposed to end on March 1, was extended as both sides were reporting progress on an agreement; the Chinese government had made space in President Xi’s schedule to go to Mar-a-Lago the end of March for a meeting with President Trump; Bob Lightheizer testified before Congress that a number of issues still have to be resolved especially on IP protections; the question, assuming that an agreement will be reached, is what is in the agreement and what happens if portions of the agreement are not enforceable.

On the USMCA passage front, both Mexico and Canada have indicated they would not sign the agreement unless they are exempted from 232 tariffs on steel and aluminum. Many Democrats and some Republicans in Congress have also echoed this. Democrats, led by Nancy Pelosi, have indicated that they want to see labor reform legislation passed and implemented in Mexico. The lower house has already passed the legislation, which now goes to the Senate. However, other concerns on labor, environmental and pharmaceutical issues still need attention according to House Democrats. The question remains whether such action can be handled in side legislation or whether language needs to be placed in the agreement itself.

Timing, again, is the key to what happens. August recess in Congress runs from July 29 through September 6. Going back home, members will likely be listening to constituents on their thoughts. The Administration would like to see passage by the time of the August recess. Elections in Canada take place on October 21. It seems more likely that any passage may not take place until 2020.

We have received some reports that would be of interest to the trade audience.

The Congressional Research Service issued two reports, one “NAFTA Renegotiation and the Proposed United States-Mexico-Canada Agreement (USMCA)” and the other “The President’s Authority to Withdraw the United States from the North American Free Trade Agreement (NAFTA) Without Further Congressional Action.”

A very interesting report edited by Enrique Dussel Peters, “The Renegotiation of NAFTA. And China?” covers both the USMCA and the relationship of Mexico and China.

The USTR has issued its negotiating objectives for a “United States – European Union” Agreement.

If the USITC releases its economic analysis on April 19, we likely will schedule another Breakfast Series meeting in about two weeks, or during the week of May 6.

Thanks for your continued support.

Ralph Biedermann
Executive Director
US-Mexico Chamber of Commerce, Mid-America Chapter
ralph.b@usmcoc.org
(224) 578-5310 Mobile

PS: For those of you who were not able to attend our "Mexico Legal, Tax and Fiscal Update" on April 3, you will find the four presentations by Baker McKenzie, Plante Moran, RSM US, and Citibank on our website at www.usmcocma.org/resources.