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Focus returns to USMCA after tariffs averted

With the U.S. threat to impose tariffs on imports from Mexico “suspended indefinitely” on June 7, the U.S. business community this week endeavored to refocus the North American trade agenda on the objective of congressional passage of the United States-Mexico-Canada Agreement (USMCA).

Importaciones 700x600In one new development, Speaker of the House Nancy Pelosi (D-CA) on June 13 appointed nine members to the House Democrats’ Trade Working Group. The working group will work with U.S. Trade Representative Robert Lighthizer to address some Democrats’ lingering concerns relating to the USMCA.

House Ways and Means Committee Chairman Richard Neal (D-MA) will lead the group. The other eight appointees are split between four different workstreams. Rep. Earl Blumenauer (D-OR) and Rep. Jan Schakowsky (D-IL) will focus on “drug pricing.” Rep. Jimmy Gomez (D-CA) and Rep. Mike Thompson (D-CA) will work on labor. Rep. Suzanne Bonamici (D-OR) and Rep. John Larson (D-CT) will head up environmental issues. Leading Enforcement will be Rep. Terri Sewell (D-AL) and Rep. Rosa DeLauro (D-CT).

House Ways and Means Committee Ranking Member Kevin Brady (R-TX) told the press this week: “I think Ambassador Lighthizer has made it clear that he’ll send the implementing bill up when he gets the green light from Speaker Pelosi… Clearly, he believes there’s an opportunity here to build larger than usual support among Democrats.” Brady said he met this week with Pelosi, Ways and Means Chairman Neal, and Senate Finance Chairman Chuck Grassley (R-IA) to talk about the path forward for USMCA.

Some recent developments augur well for USMCA: The United States on May 17 dropped tariffs on steel and aluminum imports from Canada and Mexico, Mexico approved landmark labor legislation required by the agreement, and legislatures in both Canada and Mexico have begun work toward approval of the agreement.

The Administration’s announcement on June 7 that it was suspending its threat to impose escalating tariffs on all import from Mexico was welcomed by the business community. U.S. Chamber of Commerce CEO Thomas J. Donohue stated:

“We are very pleased that the Trump administration and the Mexican government reached an agreement to address the migratory crisis at the border and remove the threat of new tariffs. This is good news for American businesses and consumers…

“With the threat of tariffs now off the table, it is critical that Congress turn its attention to enactment of the USMCA trade agreement. USMCA will preserve and strengthen North American trade, boosting economic growth and job creation. The Chamber intends to put all of its resources behind securing the earliest possible passage of USMCA.”

The Chamber had spoken out forcefully against the tariff threat, conveying its strong concerns in the press, disseminating information on the costs of the threatened tariffs on a state-by-state basis, and speaking directly to officials and members of Congress about the issue.

In addition, the Chamber joined with approximately 140 other business and agriculture organizations to issue a statement warning that “imposing unilateral tariffs on Mexico jeopardizes a successful bipartisan vote on USMCA and approval of the agreement.” The statement, signatories for which were enlisted in just a few hours, notes:

“Tariffs on Mexican imports would harm U.S. consumers, workers, farmers and businesses of all sizes across all sectors, making us less competitive and undermining efforts to negotiate strong trade deals in the future. We oppose unilateral tariffs and any subsequent retaliation. We are committed to working together to pass USMCA through Congress, but a successful effort depends on keeping North American trade tariff-free.”

In addition, Donohue joined with Carlos Salazar Lomelín, President, Mexico’s Consejo Coordinador Empresarial, to announce the formation of a partnership to address migration challenges on the border. Together with the support of their member companies, the U.S. Chamber and CCE will assist both governments in crafting solutions that mitigate the migration crisis. The two organizations stated:

“Imposing tariffs on Mexico does not address the root causes of migration and jeopardizes our shared economic interests. The U.S. and Mexican governments must work together with their business communities and their Northern Triangle counterparts to solve the current crisis.

“Our organizations are committed to swift approval of the United States-Mexico-Canada Agreement (USMCA) in our respective legislatures. That cannot be accomplished without first eliminating the tariff threat.”

For further information, please contact Senior Vice President of International Policy John Murphy (Esta dirección de correo electrónico está siendo protegida contra los robots de spam. Necesita tener JavaScript habilitado para poder verlo.).

Originally published June 2019. Reprinted by permission, uschamber.com, (June 2019). Copyright© (2019), U.S. Chamber of Commerce.