Canada’s Global Affairs consults whether South Korea, Taiwan, Thailand and the UK should join CPTPP.

The Global Affairs Canada organization includes individuals, businesses (including SMBs), industry associations, experts, consultants, academics, civil society organization, labour unions, governments, indigenous groups, students and youth and other interested Canadian stakeholders.

In late July, Global Affairs Canada started discussions whether South Korea, Taiwan, Thailand and the United Kingdom should join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”).

An announcement was published in the Canada Gazette, Part 1. Global Affairs Canada has has begun soliciting comments for whether these countries (and China) should join the CPTPP. The deadline for submissions is midnight, August 25, 2019.

The announcement asks for the following information:

1. Contributor’s name and address and, if applicable, the name of the contributor’s organization, institution or business;
2. The specific issues being addressed; and
3. Where possible, precise information on the rationale for the positions taken, including any significant impact it may have on Canada’s domestic or international interests.

Additionally, they would like feedback on specific markets that Canadians and businesses would support entry to the CPTPP.

The full text of the announcement and additional topics Global Affairs Canada would like feedback on can be found here:

http://www.gazette.gc.ca/rp-pr/p1/2019/2019-07-27/html/notice-avis-eng.html#nL5

 

14 House Democrats ask Nancy Pelosi to bring vote on USMCA.

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A group of 14 House Democrats sent a letter to House Speaker Nancy Pelosi asking her to to bring a vote by the end of the year on USMCA, the renegotiated trade with Canada and Mexico to replace NAFTA.

The letter to Speaker Pelosi reads:

“It is imperative that we reach a negotiated agreement early in the fall. Canada and Mexico are by far our most important trading partners, and we need to restore certainty in these critical relationships that support millions of American jobs.”

The 14 House Democrats:

Colin Allred (D-Texas)
Scott Peters (D-Calif.)
Kendra Horn (D-Okla.)
Haley Stevens (D-Mich.)
Anthony Brindisi (D-NY)
Joe Cunningham (D-SC)
Lizzie Fletcher (D-Texas)
Ben McAdams (D-UT)
Josh Harder (D-Calif.)
J. Luis Correa (D-Calif.)
Sharice L. Davids (D-Kansas)
TJ Cox (D-Calif.)
Susie Lee (D-Nevada)
Greg Stanton (D-Arizona)

If you have questions how the new USMCA will impact your business, contact experienced trade attorney David Hsu at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Canadian Conservative leader Andrew Scheer calls for more inspections on Chinese imports and potential tariffs.

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According to Canada’s National Observer, Conservative Leader Andrew Scheer has urged Prime Minister Justin Trudeau to step up inspections on all products from China and to consider levying tariffs on imports on Chinese imports.

The request was sent by letter last Friday in which Scheer urged Prime Minister Trudeau to take a harder line on China’s second largest trade partner. China detained two Canadians in December just days after Canada arrested Chinese high-tech executive Meng Wanzhou in Vancouver on a U.S. extradition warrant. Additionally, China has increased inspections that have led to the suspension or obstruction of key Canadian agricultural imports, including pork and canola. Last week, China announced an additional suspension of all imports of Canadian meat products because of claimed concerns over fraudulent inspection reports.

In Scheer’s publicly released letter, he writes: “There is no other way to put this: Canada is being bullied by the Chinese government and you have done nothing to stand up for Canada in response”. Scheer asks Prime Minister Trudeau to increase Canadian inspection of all imports from China and the potential of placing tariffs on some of the $75 billion worth of goods imported from China last year.

Canada bans importing/exporting shark fins.

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According to the website politics.ca, the Canadian government revised their Fisheries Act to protect fish habitat, enact new sustainability efforts and banning the import and export of shark fins in Canada.

The United States still allows the importation and exportation of shark fins – however, each state has their own specific laws about the transportation of shark fins within state lines – some states require the fin to be attached to the body, others don’t. Before you move your shark fins, contact David Hsu first.

Also, if you have encountered any problems with US Fish and Wildlife regarding your importation or exportation of shark fins – feel free to David Hsu a call/text at 832-896-6288, or by email at dh@gjatradelaw.com, or attorney.dave@yahoo.com. The rule on shark fins is complex and the penalties are great.

Mexico approves draft law to ratify USMCA.

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This past Friday, several commissions in Mexico’s Senate passed a draft law that would ratify the new trade deal with the United States and Canada – the USMCA.

The law creating the United States-Mexico-Canada Agreement, or USMCA, is set for a vote with the entire Senate this upcoming Tuesday.

The Senate leader of the Morena Party, Ricard Monreal said the trade deal will be signed and ratified this month.

Trump is currently waiting for the Democrat-led House to review the deal.

President Trump lifts steel tariffs on Canada and Mexico.

 

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Last week, President Trump lifted steel tariffs on Canada and Mexico to improve the chances of Congress approving a renegotiated North American Free Trade Agreement (NAFTA).

President Trump withdrew tariffs of 25% and 10% duties steel and aluminum from Canada and Mexico imposed a year ago. In return, Canada and Mexico said they would lift retaliatory duties on many American goods, including farm products. In addition to withdrawing the steel and aluminum tariffs, Trump also postponed the imposition of new tariffs on imported automobiles and automobile parts.

With a Democrat-led Congress, whether the US Mexico Canada Agreement (USMCA) passes is uncertain as Congressional Democrats want changes covering the enforcement of labor rights and duration of drug companies keeping an exclusivity for their products.

Huawei CFO arrested in Canada for violating U.S. sanctions on Iran.

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According to Bloomberg – Huawei’s CFO, Wanzhou “Sabrina” Weng was arrested in Canada on December 1st over Huawei’s potential violations of U.S. sanctions on Iran. Sabrina Weng is the deputy chairwoman and daughter of Huawei founder Zhengfei Ren.

The arrest prompted China’s embassy in Canada to demand Sabrina be released and for the US and Canada to “rectify wrongdoings” and to “to clarify the grounds for the detention, to release the detainee and earnestly safeguard the legitimate rights and interests of the person involved”.

It is not known when or if Sabrina will be expedited to the US.

Check back for more updates as they are available. If you have any questions about your company’s compliance with US export controls and or want to ensure your company is in compliance with all the sanctions and laws regarding exporting, contact David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

USMCA Signed at G20 Summit.

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As expected, the USMCA was signed by President Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto. The new U.S. Mexico Canada Agreement (USMCA) is a replacement for the NAFTA agreement entered in 1994 between the 3 countries.

While the agreement was signed today, each of the legislatures from the three countries will still need to ratify the agreement before it takes effect.

A full text of the agreement can be viewed here.

If you have any questions how the USMCA may impact your business, call experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

The NAFTA (USMCA) loyalty oath?

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As has been widely reported, the new NAFTA agreement (USMCA) contains what has been branded a “loyalty oath” among the US, Canada and Mexico.

What is this “loyalty oath”?
In short, the oath says that in the event any USMCA member enters into a free trade agreement (FTA) with a non-market country, the other two remaining countries can leave the agreement and form their own bilateral trade pact.

Why is this clause in the USMCA?
This clause is likely an effort by the US Administration to isolate China economically since neither Canada or Mexico would want to leave the USMCA. This clause is also aimed at limiting the imports from China to Mexico/Canada for shipment into the US duty free.

Is a “loyalty oath” found in other trade agreements?
Currently, no, however this inclusion in the USMCA may be an indication of what will occur in future trade agreements to further isolate China from their trading partners.

Is the “loyalty oath” set in stone?
Right now, no, the disclaimer on the current USMCA text states: “Subject to Legal Review for Accuracy, Clarity, and Consistency Subject to Language Authentication“. Only upon ratification by all countries can we know for sure whether this is in the agreement.

What is a market or non-market economy?
This loyalty oath against non-market economies is likely aimed at China while not specifically named in the agreement. Beijing has asked for recognition as a “market economy” within the World Trade Organization (WTO) since their accession agreement expired in December 2016. If China is branded a “market economy”, this would limit trade remedies such as anti-dumping/countervailing duties to be used against Chinese imports.

What are the non-market economies around the world?
According to the European Union, besides China, the other non-market economies include Vietnam, Kazakhstan, Albania, Armenia, Azerbaijan, Belarus, Georgia, the Democratic People’s Republic of Korea, Kyrgyzstan, Moldova, Mongolia, Tajikistan, Turkmenistan, and Uzbekistan.

Where can I read the full text of the “loyalty oath”
I could not find any news sources that cited the USMCA section.

The exact text of the oath is copied below:

4. Entry by any Party into a free trade agreement with a non-market country, shall allow the other Parties to terminate this Agreement on six-month notice and replace this Agreement with an agreement as between them (bilateral agreement).

The official PDF on the US Trade Representative website can be accessed here: (last accessed October 9, 2018).

https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/32%20Exceptions%20and%20General%20Provisions.pdf

See Article 32.10 (4)

If you have any questions about NAFTA or the USMCA and how this may impact your business, call experienced trade attorney, David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

Brief Summary of the United States-Mexico-Canada Agreement (USMCA).

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After 13 months of negotiations, the United States, Mexico and Canada have concluded the United States-Mexico-Canada Agreement (USMCA) to replace the 25 year-old NAFTA agreement. This new agreement was reached on September 30th and will not come into force until ratified (estimated to be sometime in early 2019). Below is a brief summary of some of the changes:

Dairy:
Canada to increase US access to Canada’s diary market through an increase in the Tariff Rate Quotas (TRQs) for US milk ,cream and cheese. Outside quota imports to Canada were previously subject to a 300% tariff. Canada will also take steps to eliminate their “Class 6 and 7” milk pricing structure that had the impact of making domestically produced milk more competitive in price than foreign milk.

Poultry, eggs and sugar:
Canada allowed greater access to the US exporters for poultry, eggs and sugar while the US increased their quotas of Canadian sugar and sugar-containing products.

Notice Requirement for Tariff Changes for Certain Goods:
Canada needs to notify the US of any proposed change to Canada’s tariff schedule.

Grain:
The US and Canada will avoid using discriminatory grain grading standards.

Wine, Spirits and Beer:
The new agreement allows the recognition and protection of geographic indications for goods, such as “Tennessee Whiskey” can only be used by US manufacturers and “Canadian Whiskey” can only be used by Canadian whiskey producers. “Tequila” will also only be allowed to be used by Mexican manufacturers.

Textiles:
The USMCA changed the origin rules, providing for a 10% (by weight) de minimis threshold to tolerate the presence of content from outside the region, subject to limits on elastomeric content.

Rules of Origin:
The Rules of Origin increases the de minimis threshold from 7% to 10% of FOB adjusted value.

Automotive Developments:
Revised rules of origin for automotive goods require the following (and most provisions phase-in before 2023):

-The USMCA requires a regional (North American) value content of not less than 75%. Automotive parts will also be subject to regional value content requirements of between 65% and 75%.

-At least 70% of an auto producer’s steel and aluminum purchases must be “North America-originating” for that producer’s vehicles to qualify for USMCA duty-free treatment. Auto producers must keep records of steel and aluminum purchases and certify on an annual basis that it is keeping the required records.

=Auto producers must also comply with a new “Labour Value Content” (LVC) provision for their vehicles to qualify for USMCA treatment. The LVC provision requires that workers who earn at least US$16 per hour must carry out 40 to 45% of an auto producer’s activities (i.e., manufacturing, technology, assembly). Auto producers will need to keep records and certify that they meet these requirements.

Section 232:
The USMCA requires the US to give a 60-day notice to Mexico or Canada if the US proposes future section 232 measures. Any new measures would not apply for 60 days and Canada and Mexico can “seek to negotiate an appropriate outcome”.

Intellectual Property (Chapter 20):
Main change requires a minimum of ten years of government-granted marketing exclusivity for biologics. Canada currently provides a term of eight years, whereas the U.S. provides twelve years under the Biologics Price Competition and Innovation Act (BPCIA) of 2009.

For copyright protection, the USMCA requires that copyright terms last 70 years following the life of the creator for works, and 75 years for performances and sound recordings. Canada’s current copyright terms are “life of the author plus 50 years” and 70 years, respectively.

Another notable provision is on the exclusion of “fair use” exceptions to copyright law. However, Canada is not required to adopt the U.S.-style notice-and-takedown regime for internet service providers.

Anti-Corruption:
USMCA criminalizes supply and demand sides of bribery transactions and facilitation payments.

What’s next?
The USMCA will need to be signed first and then have to be ratified by the respective countries.

If you have any questions how the new USMCA will impact your business or have questions regarding the new country of origin, IP or any other issues in the USMCA, contact David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.