Brady Says US Must Enforce USMCA, Defends US Position on Auto Rules of Origin

Agricultural and energy market access in Mexico are of concern to Rep. Kevin Brady, R-Texas, as he talks about the need to enforce USMCA's provisions, but he dismissed Mexico's concern that the U.S. is not following the treaty's text as it lays out rules for imported automobiles and light trucks to enter the U.S. tariff-free.

Brady spoke with reporters Jan. 12 about a letter he'd sent to the U.S. trade representative about the priorities Deputy USTR Jayme White should have as he talks this week to Mexico and Canada about their compliance with USMCA (see 2201120043). "We have the highest confidence in Ambassador [Katherine] Tai," he said, but added, "Her hand in future negotiations will be significantly weakened if the U.S. does not zealously enforce all concerns of USMCA."

In response to a question about Mexico's and Canada's concerns about how the U.S. is following the treaty where it concerns the auto industry, Brady said he thinks the regional value content rules are clear in the USMCA. "I think both administrations support the agreement as written, and I would expect the U.S. to defend that approach in the dispute panel," he said.

However, when it comes to limiting electric vehicle subsidies to U.S.-assembled vehicles, as is proposed in the now-stalled Build Back Better legislation, Brady said, "I do worry about President Biden starting a trade war with our two closest partners over these outrageous subsidies to corporations, wealthy individuals and others." He said that both Canada and Mexico have said that excluding cars built in their countries for the subsidy is an existential threat to their auto manufacturing industries, and that they should be listened to.