NAFTA Renegotiation

On May 18, 2017, Robert Lighthizer, the recently confirmed United States Trade Representative (USTR), notified Congress of the Administration’s intentions to renegotiate the North American Free Trade Agreement (NAFTA). This notification, required by section 105(a)(1)(A) of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, started the 90-day period in which the Administration must wait before beginning the renegotiation. This period ends on August 16, 2017, after which the Administration may begin negotiations. During this period, the USTR shall conduct both Congressional and public hearings in order to better clarify the intentions of the renegotiation. Notification from the public to testify and written testimony must be submitted by June 12, 2017.

No changes shall take effect until after the 90-day period, so importers and exporters should continue with business as usual. However, they should also note that significant changes might occur after that time period. The Office Of The United States Trade Representative has released a preliminary list of objectives about which they are seeking public comments. These objectives are presented with the goal of modernizing the NAFTA to better reflect a modern U.S. economy. These objectives include, among others, a reexamination of remaining tariffs and non- tariff barriers, changes in the treatment of digital goods, and changes to rules of origin procedures. A full list of objectives can be found here.

GTE will continue to monitor the specific objectives and changes of the renegotiation. If you have any questions or desire a consultation as to how these changes may affect your organization please contact us.

DEVELOPMENTS IN COMPLIANCE ENFORCEMENT

On August 15, 2016, the GAO (US Government Accountability Office) released a report that was critical of CBP’s handling of antidumping and countervailing duty orders, detailing the failure of CBP to collect roughly 2.3 billion in duties between 2001 and 2014.  In the report, the GAO stated the CBP “missed opportunities to identify and mitigate nonpayment risk.”  The trade community expects to see enforcement efforts increase in light of the fact that this report has a high profile and was delivered to the Senate Finance Committee.

Also released recently were CBP’s interim regulations, called “Investigation of Claims of Evasion of Antidumping and Countervailing Duties.”  These regulations took effect on Monday, August 22 and outline the process for CBP’s investigation of claims of AD/CVD order evasion. The new regulations were mandated by section 421 of the Trade Facilitation and Trade Enforcement Act of 2015 which became law earlier in 2016.  The current e-allegation system will continue to be in place, but the new system is designed to have advantages over that system; the procedures laid out include detailed steps for initiating, carrying out, and completing investigations.  This comprehensive process for investigating can be used by other government agencies as well as private parties.