USMCA Technical Corrections Bill Hung Up in Senate

The USMCA technical corrections bill seems to have stalled out on the Hill, as Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said at a meeting a month ago, he was seeing there was not unanimity among Democrats, and without that, it cannot be done quickly. A Senate Finance Committee spokesman said, “The bottom line is that it’s not clear to us whether certain Democrat senators who voted against USMCA would hold up technical corrections should a package come up for a unanimous consent vote.”

Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, corroborated that, saying that a unanimous consent motion would be needed to get the bill through the Senate. “There seems to be a hang-up with senators who opposed the U.S.-Canada-Mexico trade agreement,” he said in a phone call with reporters on Sept. 10.

Earlier in the week, CBP Executive Director of Trade Policy and Programs John Leonard said agency officials will have “to take direction from Congress,” to see if the treatment of foreign-trade zones would return to how it was under NAFTA.

It's not clear how much lobbying is happening to get a bill through this year. One major trade group said it's not a priority for its companies. However, the National Association of Foreign-Trade Zones is trying to spur grassroots lobbying to keep FTZs out of the bill.

With the passage of the implementing bill, goods manufactured in FTZs are counted as U.S. goods -- even if they have some inputs from outside of North America -- as long as they otherwise meet the product's rule of origin. That was not true under NAFTA.

The NAFTZ is urging its members to fight a return to the NAFTA approach, and lobby their representatives. “The Office of the United States Trade Representative (USTR) is trying to re-impose this restriction by inserting a similar provision in what is known as a 'technical corrections' bill. USTR evidently claims that it was an oversight when they did not ask Congress to include the restriction in the USMCA bill,” NAFTZ wrote in a Sept. 9 letter. “We believe that without the harmful NAFTA restriction, the new USMCA can provide FTZ-based manufacturing firms with new opportunities to succeed throughout the nation. Now we need to convince members of the United States Senate and House of Representatives to stand up to USTR’s pressure and keep the FTZ Rules-of-Origin provision out of the technical corrections bill.”

Brady told International Trade Today that members are discussing this question, and there's no consensus. He said he is also still thinking about which approach he supports. But, he said, this issue is not holding up the bill in the House.