In this file:
· CUSMA pact takes effect under cloud of disputes, COVID-19
· Senator says enforcement is key now that USMCA is in place
CUSMA pact takes effect under cloud of disputes, COVID-19
Deal appears to assure continuity of trade for agriculture
By Dave Graham, David Lawder, David Ljunggren, GFM Network News
via Canadian Cattlemen - July 1, 2020
Washington/Mexico City/Ottawa | Reuters — A modernized U.S.-Mexico-Canada trade pact took effect on Wednesday, ensuring continuity for manufacturers and agriculture, but the threat of disputes is exposing cracks in what was meant to be a stronger North American fortress of competitiveness.
As the deal kicks in, the Trump administration is threatening Canada with new aluminum tariffs, and a prominent Mexican labour activist has been jailed, underscoring concerns about crucial labor reforms in the replacement for the 26-year-old North American Free Trade Agreement.
The Canada-U.S.-Mexico Agreement includes tighter North American content rules for autos, new protections for intellectual property, prohibitions against currency manipulation and new rules on digital commerce that did not exist when NAFTA launched in 1994.
Trump had lambasted NAFTA as the “worst trade deal ever made” and repeatedly threatened to end it.
CUSMA launches as the coronavirus has all three countries mired in a deep recession, cutting their April goods trade flows — normally about $1.2 trillion annually — to the lowest monthly level in a decade (all figures US$).
“The champagne isn’t quite as fizzy as we might have expected — even under the best of circumstances — and there’s trouble coming from all sides,” said Mary Lovely, a Syracuse University economics professor and senior fellow at the Peterson Institute for International Economics in Washington. “This could be a trade agreement that quickly ends up in dispute and higher trade barriers.”
Issues dogging CUSMA include hundreds of legal challenges to Mexico’s new labour law championed by President Andres Manuel Lopez Obrador to ensure that workers can freely organize and unions are granted full collective bargaining rights.
A ruling against it would harm Mexico’s ability to deliver on provisions aimed at ending labour contracts agreed without worker consent that are stacked in favour of companies and have kept wages chronically low in Mexico.
Democrats in the U.S. Congress had insisted on the stronger labour provisions last year before granting approval, prompting a substantial renegotiation of terms first agreed in October 2018. The arrest of Mexican labour lawyer Susana Prieto in early June has fueled U.S. unions’ arguments that Mexican workers’ rights are not being sufficiently protected.
“I remain very concerned that Mexico is falling short of its commitments to implement the legislative reforms that are the foundation in Mexico for effectively protecting labor rights,” U.S. Representative Richard Neal, chairman of the House ways and means committee, said on Tuesday, adding that CUSMA’s success “truly hinges” on its new labour enforcement mechanism.
On Wednesday, U.S. Trade Representative Robert Lighthizer in a video touted CUSMA as the “most far-reaching, beneficial and modern trade agreement in our history,” adding that it would create tens of thousands of new U.S. manufacturing jobs.
But Lighthizer has also said he will file dispute cases “early and often” to enforce CUSMA provisions, citing Mexico’s failure to approve U.S. biotech products.
That could lead to increased tariffs on offending goods, such as products from individual factories where labour violations are found. Former USTR general counsel Stephen Vaughn, a legal architect of the Trump administration’s “Section 301” tariffs on Chinese goods, was appointed on Wednesday to a U.S. roster of panelists to settle state-to-state dispute cases under CUSMA.
Carlos Vejar, a former Mexican trade negotiator, said it was in the country’s interest to uphold pledges made to strengthen unions and end child labour.
“If Mexico isn’t mindful of this, there will be cases against Mexico, and Mexico will lose them,” Vejar said.
Aluminum tariffs redux, automotive burdens ...
Senator says enforcement is key now that USMCA is in place
By Mark Dorenkamp, Brownfield
July 1, 2020
With the U.S. Mexico Canada Agreement fully in place, members of Congress are stressing the importance of strong enforcement.
Minnesota U.S. Senator Tina Smith tells Brownfield the spirit and letter of USMCA must be adhered to.
“I know we’re already worried about how that’s unfolding with Canada and some of the steps that they’re already taking it looks like to limit access to dairy products. So we need to just continue to push on that.”
Smith, a Democrat and member of the Senate Ag Committee, calls USMCA a bipartisan agreement that was improved when Congress got involved in negotiations...
more, including audio [5:56 min.]