USMCA Committees Digging Into SPS, Express Shipping, Drawback and Minimum Data Elements

Mexico and Canada emphasized how the COVID-19 pandemic has proven the need for interlinked supply chains, but U.S. Trade Representative Katherine Tai emphasized supply chains' downside as she, Mexico's economy minister and Canada's trade minister sat down to the first Free Trade Commission meeting of the USMCA. Tai said, "Not only have we discovered the fragility of our supply chains, but we have just begun to appreciate the degree to which they run counter to our collective goals of ensuring that workers within North America, and outside it, are paid a fair wage, in a safe workplace."

In addition to sharing opening statements at the May 18 meeting, Mexico shared a summary of the work of a number of committees, including the Customs and Trade Facilitation Committee. That summary said that there have been technical meetings between the U.S. and Mexico to discuss the scope of Article 7.3, which says, "To the extent possible, in accordance with its law, each Party shall publish, in advance, regulations of general application governing trade and customs matters that it proposes to adopt and shall provide interested persons the opportunity to comment before the Party adopts such regulations." The summary said the two sides are not in agreement on the scope yet.

The summary also talked about the Committee on Sanitary and Phytosanitary Measures, which met for the first time May 6, and talked about the regulatory process for products and organisms that used gene editing, often known as GMOs. "Mexico reiterated its commitment to ensure compliance with the obligations assumed in the chapter on Sanitary and Phytosanitary Measures, as well as to promptly address any problems or concerns that may arise," the summary said, and said that Mexican officials believe "the Committee is an adequate mechanism that will allow for timely follow-up of implementation and stressed that it is essential to take advantage of the various tools offered by the chapter."

The committee that discusses rules of origin met twice in May, to discuss both the rules and the procedures around them. They discussed minimum data elements, express shipping, drawback and exceptions to the certification of origin. "During the Committee meeting, the Parties had a productive discussion and will continue to analyze additional texts that provide practical and useful guidance to promote better compliance with the provisions of the treaty," the summary said.

In opening statements, Mexican Economy Minister Tatiana Clouthier said, "We must continue working together in strengthening regional value chains and in relocating production in North America in key sectors like vehicle production, semiconductors, or pharmaceuticals."

"I want to convey President [Andres Manuel] Lopez Obrador's commitment to USMCA. It is a priority of his administration and, as I mentioned, one of the main tools for post-pandemic recovery," she said in an official English translation of her remarks.

Canada's Mary Ng also struck a positive note on how the pandemic clarified the need for trade. "We know the fight against COVID-19 has been incredibly challenging for workers, families, communities and businesses around the world -- and has disproportionately impacted our most vulnerable," she said. "But it has also shown us the resilience of our industries, the importance of our trade relationships, and how critical it is to maintain open global supply chains."

In contrast, Tai's opening statement repeatedly argued that business interests were overly privileged in past trade policy. "Under a worker-centric trade policy, I pledge my commitment to ensuring that workers and environmentalists enjoy their own pride of place, so that we can continue to address the race-to-the-bottom that has characterized the trading system over the past several decades," she said. "We have taken important steps in USMCA to curb that downward pressure, but I view our trilateral relationship as a constant work in progress in pursuit of shared prosperity."

She also said, "For too long, the focus has been on 'global value chains,' as a proxy for maximizing efficiency. That efficiency has proven to be detrimentally expensive."

Tai and Ng both mentioned how they are working together to combat forced labor, and the need to integrate the fight against climate change into trade. "If we choose to be strategic, bold, and innovative, we can bolster existing supply chains and develop new ones in the areas of clean and emerging technologies," Tai said.