Tai Hosts First Meeting of USMCA Free Trade Commission

Trade Update • MAY 19, 2021

OOn Tuesday, U.S. Trade Representative Katherine Tai hosted a virtual meeting with Mexican Economy Minister Tatiana Clouthier, and Canadian International Trade Minister Mary Ng to discuss the United States-Mexico-Canada Agreement near its one-year anniversary.

In her opening remarks, Tai said that even though they “may respectfully disagree on some issues today and in the future, I know that we will work hard to renew our partnership, using the tools we have designed in this Agreement, and deliver solutions for all the people we serve and represent.”

USMCA Implementation Review

At the meeting, nearly a dozen committees responsible for overseeing the implementation of different USMCA provisions that have been convening virtually since the deal went into effect last July, presented their assessments to top trade officials from the three countries. Areas covered by the Committees included: Origin and Origin Procedures; Textiles and Apparel Trade Matters; Trade Facilitation; Sanitary and Phytosanitary Measures; Technical Barriers to Trade; Transportation Services; Financial Services; Intellectual Property Rights; State-Owned Enterprises and Designated Monopolies; Small and Medium-Sized Enterprises Issues; Competitiveness; and Good Regulatory Practices.

In a joint statement, the three ministers said they took note of the headway made so far and offered recommendations for future work to maintain progress, which they described as “critical to the Agreement’s continued implementation.” Additionally, they directed the Committees “to explore new approaches to better engage with underrepresented communities on trade issues so that the Agreement can best advance equity and opportunities for all stakeholders and to ensure that North America remains the most competitive region.”

Focus on Labor & Environmental Issues

Amid the dueling labor complaints filed last week by the U.S. and Mexico, the trade ministers affirmed “their desire to champion trade policies that support good jobs that are protected by robust and fully enforced labor laws.” In this regard, the three committed to using the new processes established by the USMCA and “continuing their productive dialogue on these and other labor matters through an upcoming Labor Council meeting.”

Regarding environmental concerns, the three ministers committed to increasing law enforcement cooperation, particularly in the areas of wildlife trafficking and illegal logging, and associated trade. They also pledged to work toward full implementation of the USMCA environment commitments and continue engagement to address the most pressing environmental challenges, including the possibility of cooperating on trade-related climate change measures.

Canada-U.S. Issues Discussed

In advance of the meeting, USTR Tai and Minister Ng spoke by phone to discuss several areas of cross-border friction including their countries’ long-standing lumber dispute, dairy tariff-rate quotas, and Canada’s recently proposed digital service tax, among other issues. “Ambassador Tai and Minister Ng committed to working together to address their shared goals of recovering from the COVID-19 pandemic, building back better, addressing the climate crisis, combating forced labor, and strengthening North American supply chains and small businesses,” the USTR’s readout of the call states.

According to the Canadian version, Ng “raised Buy America and the importance of the long-standing Canada-United States economic partnership, cross-border infrastructure investments, strengthened supply chains, and mutual energy-security advantages to build back a better economy.” Ng is said to have reiterated that it was in the best interest of both countries to reach an agreement on softwood lumber. She also expressed concerns about the impacts of U.S. safeguard duties on the solar industry.

During Tuesday’s meeting, the two ministers also expressed their shared commitment to implementing the Roadmap for a Renewed United Stated-Canada Partnership, a sweeping agreement announced earlier this year by Prime Minister Justin Trudeau and President Joe Biden that outlines a path for mutual cooperation between Canada and the U.S. on a range of issues including the “top priority” of ending the COVID-19 pandemic.

Next Steps

The USTR announced in a Federal Register notice that that the first environment committee meeting under the USMCA will be held virtually on June 17, where it will review progress on the environment chapter’s implementation, discuss how each country is meeting its obligations and receive a presentation from the Commission on Environmental Cooperation.

In mid-October the committee dealing with SME issues is to convene a dialogue in San Antonio, Texas, where the three governments will “engage directly with a diverse group of small business stakeholders, including those owned by women, Indigenous peoples, and other underrepresented groups, to help ensure that everyone is included in, and can benefit from, the Agreement,” the ministers announced.

It was also agreed that a meeting of trade deputies will be held before the end of the year “to assess progress on the areas highlighted today and identify ongoing opportunities for future engagement.”