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Trump Eyes July 1 for USMCA Implementation
The Trump administration is eyeing July 1 as its target for implementing the United States-Mexico-Canada Agreement (USMCA), despite warnings from industries that doing so amidst the coronavirus pandemic could be problematic.
The trade deal to replace NAFTA was originally set for implementation on June 1, but the trio of countries missed key deadlines to implement USMCA by that date. The Mexican government has been pushing for a longer transition period, which Canada has largely agreed to, according to Politico. U.S. Trade Representative (USTR) Robert Lighthizer has said little about such an extension, and continues to push for July 1 implementation, which many officials viewed as ambitious even before the pandemic began.
A delay in implementation of the auto rules would be good news for automakers, who are currently either dealing with regional shutdowns or revamping their production lines to help meet medical equipment needs. Auto industry groups have already been vocal in urging the three countries to hold off on enforcing the new auto rules.[1]
The Mexican and Canadian governments sent notifications to certify they have met the required procedures for the deal to go into effect, leaving the U.S. with a chance to send theirs forward this month. In doing so, the deal would go into effect July 1.
However, a laundry list of issues aside from the autos origin rules remains. Each country must select and exchange a list of the panelists they want to participate in settling disputes. They also must work out how they will respond to labor disputes under the new rapid response labor mechanism, which was a major reason a majority of congressional Democrats voted for USMCA.
Canadian Deputy Prime Minister Chrystia Freeland, however, didn’t specify that Canada is eyeing a July 1 start date when Canada submitted its notification. Instead, she said she’s “hopeful that the new NAFTA will enter into force later this year,” adding Canada will work with the U.S. and Mexico to figure out the best date. “We want to ensure the new NAFTA will support a strong economic recovery once we have put the COVID-19 pandemic behind us — which we will,” Freeland said in a statement.[2]
Could COVID-19 Bring an End to the Boeing-Airbus Dispute?
Trade officials from the European Union (EU) and U.S. are having discussions on potentially easing tariffs from the long-running Large Civil Aircraft Dispute, as the coronavirus has seemingly shifted the tone for finding a solution to the nearly 16 year-long dispute.
“There is a live, ongoing discussion between Commissioner [Phil] Hogan and Ambassador [Robert] Lighthizer. Both addressed trying to deal notably with the Airbus-Boeing issue but also to see how we can build a positive agenda and get rid of the punitive tariffs that the U.S. has imposed,” said Sabine Weyand, director-general for trade at the European Commission. Weyand, the most senior career official in the Commission’s trade division, said “it makes no sense” for the U.S. to impose tariffs on EU food producers after Washington won the ability to retaliate against the EU.[3]
Boeing and Airbus, the two aerospace giants at the center of the dispute, have found themselves in far different situations than at the beginning of this year. The coronavirus pandemic has wreaked havoc on commercial passenger airlines, and government assistance for the aircraft industry has been crucial throughout existing and proposed COVID-19 related legislation.
Weyand added that the crisis gives the pair of governing bodies a “fresh look” at policy measures related to enforcing trade restrictions and could potentially pave the way for resolution.
References
[1] Rodriguez, Sabrina. “Trump pushes for start of his signature trade deal.” Politico Pro. 09 April 2020. https://subscriber.politicopro.com/article/2020/04/trump-pushes-for-start-of-his-signature-trade-deal-1913084
[2] Rodriguez, Sabrina. “Trump pushes for start of his signature trade deal.” Politico Pro. 09 April 2020. https://subscriber.politicopro.com/article/2020/04/trump-pushes-for-start-of-his-signature-trade-deal-1913084
[3] Behsudi, Adam. “EU official: Transatlantic talks continue over punitive tariffs.”
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