CBP Launches the United States-Mexico-Canada Center to Coordinate Implementation of USMCA

Originally posted on the CBP website.

WASHINGTON— To help coordinate implementation of the United States-Mexico-Canada Agreement, which enters into force on July 1, U.S. Customs and Border Protection recently opened the USMCA Center.

Staffed with CBP experts from operational, legal, and audit disciplines, as well as in collaboration with Canadian and Mexican customs authorities, the USMCA Center is a cornerstone of CBP’s USMCA implementation plan and will serve as a central communication hub for CBP and the private sector community, including traders, brokers, freight forwarders and producers, ensuring a smooth and efficient transition from the North American Free Trade Agreement to USMCA.

“The Center is integral to successful implementation of USMCA, as it will focus on outreach, training, and developing new regulations and procedures, while providing consistency and transparency to the trade community,” said Brenda Smith, Executive Assistant Commissioner of CBP’s Office of Trade. “This all comes down to making sure that American consumers get their goods safely, securely and predictably, while protecting the economic security of the United States.”

USMCA is a new trade agreement that modernizes certain NAFTA provisions, reflecting developments in technology and 21st Century supply chains.  USMCA calls for new approaches to rules of origin, agricultural market access, digital trade, and financial services while protecting the labor rights of workers in key industries, and strengthening the protection of intellectual property rights.

The USMCA Center staff will be CBP’s experts on the trade provisions of USMCA, providing guidance to private and public sector stakeholders. Center staff will facilitate a smooth transition from NAFTA by coordinating and scheduling outreach events, responding to training requests, developing and distributing information resources, and updating CBP regulations on pending USMCA topics/issues, while also providing clear and transparent technical guidance on USMCA’s new compliance obligations. Center staff will work closely with Centers of Excellence and Expertise and the ports to ensure CBP’s implementation is uniform and supports U.S. economic security.

Please note: NAFTA rules will continue to apply until July 1 when USMCA enters into force.

Additional information about the agreement, compliance guidance, and implementation efforts may be found on the agency's USMCA webpage. Inquiries for the USMCA Center can be directed to USMCA@cbp.dhs.gov.

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Port Laredo once again the nation’s No. 1 gateway for international trade

Port Laredo

Originally Published in FreightWaves

Port Laredo has regained the No. 1 spot among the nation’s 450 international gateways for trade, topping the Port of Los Angeles for the second time in a year.

During February, Port Laredo recorded $18.6 billion in two-way trade, while the Port of Los Angeles had $17.2 billion, according to the latest U.S. Census Bureau data analyzed by WorldCity.

Port Laredo’s new ranking is tied to the ongoing U.S.-China trade war and the coronavirus pandemic that has hurt the Port of Los Angeles, said Ken Roberts, an economist at WorldCity.

“A stunning development the first time, the result of the impact of the U.S.-China trade war on the [Port of Los Angeles], this time it’s the one-two punch of the ongoing trade war and the coronavirus pandemic that has sent it, the U.S. economy and the global economy, reeling,” Roberts said in Forbes.

The Port of Los Angeles fell to second, largely because of its dependence on Chinese imports, Roberts said. The ports trade with the world declined 15.2% in February, according to WorldCity.

Port Laredo, located in South Texas along the U.S.-Mexico border, is made up of four international vehicle bridges, one international rail bridge and an international airport.

Around 16,000 trucks cross the port’s bridges daily, totaling $231.58 billion in imports and exports in 2019.

Port Laredo previously surpassed the Port of Los Angeles in March 2019 as the nation’s number one trade hub. It was the first time in the port’s 168-year history that it ranked first. The Port of Los Angeles regained the top spot a month later in April 2019.

Roberts predicted that Port Laredo will be the leading trade port for the foreseeable future due to its proximity to Mexico, the U.S.-China trade war and the lasting effects of the coronavirus.

Mexico finished 2019 as the leading U.S. trading partner for the first time in history and continues to be the nation’s top trading partner for the first two months of 2020.

“This time, unlike last time, it is not likely to be a one-month aberration,” Roberts said. “Port Laredo passed the Port of Los Angeles before the full brunt of the impact of coronavirus would have even hit the Los Angeles seaport.”

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What Does the New USMCA Look Like for Mexico?

USMCA

August 2017, trade negotiators from the United States, Mexico and Canada met for the first time in Mexico City to begin hashing out a new North American Free Trade Agreement.

Two and a half years and many negotiations later, the U.S.-Mexico-Canada Agreement (USMCA) has finally passed both chambers of the United States' Congress. The agreement — which overhauls North America's trade relations — is now poised to become U.S. law and the region's governing economic framework, as Mexico's Congress has already passed the deal and Canada's Parliament is expected to follow suit in late January.

While the political negotiations are wrapping up, the next and final step will be the agreement's implementation across North America.

In the coming months and years, these new rules will shape the region's trade realities. Some rules may unleash investment, trade and better labor conditions, but they likely won't be without additional hurdles. In Mexico, the agreement will touch most parts of the country's $1.15 trillion economy, but it will be felt most immediately and strongly in the overall investment climate, the automotive manufacturing sector and in labor conditions.

USMCA Provides Predictability

While less tangible, the agreement's biggest shift will take place at the macroeconomic level, as the USMCA solidifies trade rules and provides greater certainty for North American businesses operating across the continent. Ever since the USMCA's negotiations began, the economic climate has been wracked by uncertainty, especially when specific issues threatened to derail the agreement or every time that the U.S. administration threatened to pull out of NAFTA without any viable alternative.

With the USMCA in place, Mexico has a stronger investment framework and more transparency, clarity and protections for businesses operating in the country.

Read the entire article here.

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Trump signs revised trade deal with Mexico, Canada but shuts Democrats out of celebration

USMCA signing

WASHINGTON – Still facing a divisive impeachment trial in the Senate, President Donald Trump celebrated a rare bipartisan achievement Wednesday when he signed into law a revamped trade deal with Mexico and Canada.

Surrounded by business leaders wearing hard hats, Trump portrayed the new U.S.-Mexico-Canada Agreement, or USMCA, as "a colossal victory" for American farmers, manufacturers and other workers.

"For the first time in American history, we have replaced a disastrous trade deal that rewarded outsourcing with a truly fair and reciprocal trade deal that will keep jobs, wealth and growth right here in America," Trump said during a signing ceremony on the White House South Lawn.

Trump gave a shout-out to more than two dozen Republican lawmakers whom he credited with helping push the deal through Congress.

Left off of his list of plaudits and missing from the celebration: Congressional Democrats, who put their own stamp on the agreement and whose support was pivotal to helping it secure congressional approval. House Speaker Nancy Pelosi's office said no Democrats were invited to the ceremony.

The revised trade deal, one of Trump's top legislative priorities, is the product of months of negotiations and replaces the North American Free Trade Agreement, or NAFTA, which essentially eliminated tariffs on most goods traded among the three countries.

The agreement guarantees U.S. farmers greater access to Canada's agriculture market and puts new e-commerce rules in place. It also dictates that a higher percentage of autos be made from parts manufactured in North America and requires that at least 40% of vehicle production be done by workers earning at least $16 per hour.

In addition, the pact, which is supported by labor unions and business groups, includes stronger provisions on labor, enforcement and pharmaceuticals that Democrats had sought as a condition for their approval of the agreement.

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Trump’s new USMCA trade deal looks a lot like NAFTA. Here are key differences between them.

USMCA Trade

President Trump and House Speaker Nancy Pelosi on Tuesday announced a deal on the United States-Mexico-Canada Agreement (USMCA) that will bring it to a vote in Congress and remove the last barrier to enact the trade pact. The Wall Street Journal reports the vote will be held next week.

The agreement between congressional Democrats and the White House comes after rounds of negotiations that stretched for more than two years between US, Mexican, and Canadian officials. Their intention to redraw the North American Free Trade Agreement, or NAFTA - the trade deal regulating international business around North America for over a quarter-century.

Trump tweeted early Tuesday morning and championed Democratic support for the deal, calling it a win-win for everyone in the United States.

"It will be the best and most important trade deal ever made by the USA. Good for everybody - Farmers, Manufacturers, Energy, Unions - tremendous support," Trump said. "Importantly, we will finally end our Country's worst Trade Deal, NAFTA!"

It was held up in the US as Democrats, particularly progressives, demanded tougher labor and environmental protections and stronger enforcement provisions. They were able to lock in those additional rules sought in the emerging deal.

The three leaders - President Donald Trump, Canadian Prime Minister Justin Trudeau, and Mexican President Enrique Peña Nieto - signed the agreement late last year but final revisions must also be approved by each country's legislature and leadership before it comes into effect. Mexico ratified the agreement in June and Canada is on its way to doing so.

Congress is expected to pass the agreement with bipartisan support, giving the president a major trade victory as he attempts to fight off Democratic-led impeachment proceedings and campaign for reelection.

Trump and other US officials have long called NAFTA dead, saying the USMCA is a wholesale overhaul of the agreement. Despite Trump's declaration, the USMCA still maintains large swaths of the original deal and is more of an update to the existing deal than a full-on rewrite. But there are some key differences.

Read Entire Article Here

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Regional Development Key to a Strong North American Trade Bloc

North American Trade Bloc

For many years now, a concern of mine has been that the purpose of free trade and the agreements that envelop trade between regions has not been properly explained or promoted to communities, especially at the grass roots level.

Recently, Guillermo Malpica, trade commissioner of Mexico and executive director at the American Chamber of Commerce in Monterrey, Mexico, paid San Antonio a visit for a series of roundtables and presentations on the United States-Mexico-Canada Agreement(USMCA). At an energy sector meeting with Malpica, San Antonio energy industry leaders investing in Mexico were expecting to get a sense of direction and clarity regarding Mexico's energy policies.

One roundtable participant asked "what industries are the winners and the losers" in the USMCA. When you ask questions like these, you are basically taking apart a macroeconomic tool and looking at the individual parts. Separate parts don't work unless they are put together like a precision clock.

These types of agreements are not meant to be dissected. Not unlike the cute little frog you dissected in school, the innards don't look pretty. Trade agreements are macroeconomic tools that are designed to benefit economies. Yes, there were industries that were hit very hard once NAFTA came into play, but those industries were not ready.

The signals were clear when Mexico agreed to enter the General Agreement for Trade and Tariffs GATT in 1978 (today the World Trade Organization). My father, the Deputy Director General for the Foreign Trade Institute of Mexico during the 1970s, would have conferences and meetings with Mexican manufacturers, warning them to be ready to compete, up their quality, and export.

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Mexico first to ratify USMCA trade deal, Trump presses U.S. Congress to do same

USMCA Trade Deal

MEXICO CITY (Reuters) - Mexico on Wednesday became the first country to ratify the United States-Mexico-Canada Agreement (USMCA) agreed late last year to replace the North American Free Trade Agreement (NAFTA) at the behest of U.S. President Donald Trump.

By a vote of 114 in favor to 4 against, Mexico's Senate backed the deal tortuously negotiated between 2017 and 2018 after Trump repeatedly threatened to withdraw from NAFTA if he could not get a better trade agreement for the United States.

Mexican President Andres Manuel Lopez Obrador had already anticipated ratification this week in the Senate, where his leftist National Regeneration Movement (MORENA) and its allies have a comfortable majority in the 128-member chamber.

There has been little parliamentary opposition in Mexico to trying to safeguard market access to United States, by far Mexico's top export destination, and the trade deal was approved with overwhelming cross-party support in the Senate.

Mexico sends around 80% of its exports to the United States, and Trump last month vowed to impose tariffs on all Mexican goods if Lopez Obrador does not reduce the flow of U.S.-bound illegal immigration from Central America.

Lopez Obrador says he wants to avoid conflict with Trump, but noted at the weekend that the tariff dispute showed Mexico needed to become more economically self-sufficient.

Trump congratulated Lopez Obrador on Twitter for Mexico's approval. "Time for Congress to do the same here!" he wrote.

Lopez Obrador, meanwhile, posted a video on Twitter in which he called the Senate's approval "very good news" and said it augured well for Mexico's relations with the United States.

Canada, which has also fought with Trump over trade, is pressing ahead to ratify the deal. The main question mark hanging over its ratification is in the United States, where Democratic lawmakers have threatened to block the process.

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Trade War Update: Port Of Los Angeles No Longer Top ‘Port’ — It’s Laredo

Port of Los Angeles

The Port of Los Angeles is no longer the nation's leading port, further evidence that the U.S.-China trade war is scrambling the deck chairs of U.S. trade.

Laredo, a city of 260,000 hard on the U.S.-Mexico border, is.

In the month of March, the latest U.S. Census Bureau data available, Port Laredo's trade was $20.09 billion while trade through the Los Angeles port's was $19.66 billion. Laredo's trade was up 9.52% from February while the Port of Los Angeles' trade was down 10.01%.

Although it is just one month of trade, and although the Port of Los Angeles remains the nation's top-ranked port year-to-date among the more than 450 airports, seaports and border crossings, it is just one more sign that President Trump's efforts to force change in China's policies is having an impact.

In previous columns, I have written how China went from buying 57% of all U.S. soybeans to dropping 94.75% in one month. I have written about how China went from being the second-leading buyer of U.S. oil to buying none. I have written about how U.S. trade with China fell fasterearlier this year than at any time in at least 17 years. I have written that China now accounts for a lower percentage of U.S. imports than at any time since 2012. And I have written that Mexico is now the United States' leading trade partner, having replace China.

And now this.

At work, in part, is how important Mexico trade is to Laredo and how important China trade is to Los Angeles. Laredo, in particular.

No other port has handled more trade with one country than Laredo does with Mexico, more than $228 billion in 2018. That''s because last year and this year, Mexico has accounted for more than 97% of all Port Laredo trade.

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Mexico Border Delays Seen Weighing on US Investment, Factories

Border Delays

More cargo from Mexico to the United States is being held up at the border, accompanied by increasing evidence that such delays are dimming prospects for American companies.

Slower trade between the countries since federal border officers recently were redirected to deal with a surge in migrants has been socking businesses with additional shipping costs. The effects likely will cause a modest headwind for second-quarter nonresidential investment growth — which cooled at the start of the year — and already helped to push a U.S. factory gauge to a two-year low in April, according to Bank of America Corp.

"The delays generate a meaningful direct cost for businesses," economist Stephen Juneau said in an e-mail May 6. The disruption may have a significant impact on the flow of goods, as more than 86% of Mexican imports enter the U.S. by land, and impose some $5.5 million in additional costs on U.S. businesses each month, he wrote in a report May 3.

Trucking company Werner Enterprises Inc. said on an April 25 earnings call that it expects border crossing to be "slow for the foreseeable future."

"Freight is still crossing the border at a very slow rate by comparable standards," said Derek Leathers, CEO of the Omaha, Neb.-based company.

Werner ranks No. 15 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.

U.S. Customs and Border Protection said March 27 that trade processing would slow, with as many as 750 officers from crossings in the San Diego, Tucson, Ariz.; El Paso and Laredo, Texas, regions being re-assigned. President Donald Trump the next day renewed threats to close the border.

The Institute for Supply Management's factory survey last week showed April conditions at the weakest since October 2016, though still expansionary. The production component also fell to a more than two-year low, which Juneau said likely was in part because of border delays.

Ventus Global Logistics offer solutions to reroute your goods to avoid delays at the border. Contact us for a free quote.

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China and Canada fall away as Mexico becomes the US’ biggest trading partner

Trade with Mexico

In the trade war with the United States, China's loss is Mexico's gain.

China's bilateral trade with the US weakened in the first quarter of this year after export order front-loading from both countries started to fade. Mexico has taken advantage of
the trade tariffs on Chinese goods to become the US' top trading partner of the US so far this year, according to new data from the US Census Bureau.

This shows that while US President Donald Trump has stood firm on stopping Mexican immigrants on the US' southern border, he has not been able to stop the flow of Mexican goods, which are partially filling the gap left by Chinese goods affected by the trade dispute.

The news comes despite the fact that Trump has been trying to force a revised deal through Congress to replace the 1994 North American Free Trade Agreement, covering the trilateral trade bloc of Canada, United States, and Mexico.

The US had US$102.5 billion in goods trade with Mexico in the first two months of the year. In second place was Canada at US$97.5 billion and then China at US$96.7 billion, according to seasonally adjusted data from the US Census Bureau. Mexico had been in third place, behind Canada and China.

China's General Administration of Customs has said that from January to March, overall trade with the US fell 11 per cent year on year, to 815.8 billion yuan (US$121 billion). The US is now behind the European Union and the Association of Southeast Asian Nations in order of
China's biggest trading partners.

China was still the home to most US imports – US$80 billion – but that was down 11 per cent from January-February a year earlier. By contrast, Mexican exports to the US rose 5 per cent to US$58.7 billion over the same period.

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