Mexico first country to ratify USMCA.

people near indian flag

Photo by Ricardo Esquivel on Pexels.com

This past Wednesday, Mexico became the first country to pass the new U.S.-Mexico-Canada Agreement (USCMA) to replace NAFTA. NAFTA was a free trade agreement also entered between the three countries over 25 years ago. As Mexico sends 80% of exports to the US, the passage of the trade agreement is a necessity for Mexico.

Canada’s Prime Minister Justin Trudeau is trying to get the deal through the Canadian Parliament while in the United States, House Speaker has not yet put the passage of the USMCA up for vote. The House Speaker and her Democrat allies hold a majority in the House and are requiring stronger enforcement mechanisms for the provisions related to labor and environmental rules.

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

Japan proposes cutting U.S. farm tariffs to TPP levels.

buildings

Photo by Alex Knight on Pexels.com

During last week’s bilateral trade talks between the US and Japan, Japan proposed reducing tariffs on U.S. agricultural products to the current levels for TPP members.

This would have the impact helping American farmers and ranchers whose imports have become less competitive in the Japanese market compared to their Australian and Canadian counterparts who are part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (previously known as the Trans-Pacific Partnership).

However, this reduction in agricultural tariffs would require the US to remove US import taxes on Japanese automobiles and vehicle parts.

The two countries met for two days last week but no firm agreement was reached.

Mexico approves draft law to ratify USMCA.

close up of red white and green country flag

Photo by Tim Mossholder on Pexels.com

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.

WTO ruling sets precedent for WTO authority to determine whether national-security concerns justify trade restrictions.

saint basil s cathedral

Photo by Julius Silver on Pexels.com

According to Bloomberg on April 5, 2019, the WTO ruled on a Russia and Ukraine dispute that set the precedent for two things: (1) rights of nations to impose trade restrictions on national-security grounds and (2) WTO’s authority to determine whether a national security threat justifies trade restrictions. However, the US hold the position the WTO does not have the power to rule on these two issues.

Ironically, WTO Director-General Roberto Azevedo agrees the WTO should not mediate regional security conflicts, but said the cases were brought to the WTO and that the world body did not have an option.


Personally, I don’t believe China will bring a case to the WTO for the steel and aluminium duties as the US and China are currently reaching a deal. Also, if China and the US bring a case to the WTO, they would further justify and open the door for the WTO’s authority and national-security determination decision making power over any member to the world body.

I believe this WTO decision is a single occurrence likely to not happen again. The WTO is a trade organization and is not capable of understanding, addressing and enforcing regional security issues such as those between Russia and Ukraine.

Will be interesting to see what happens – will post more as updates become available.

Japan and US set for bilateral trade talks in mid-April.

black and white mountain over yellow white and blue sky

Photo by Pixabay on Pexels.com

The US and Japan will hold trade talks on April 15 and 16 in Washington as part of President Trump’s campaign promise for fair and reciprocal trade. Trump will most likely work on resolving the large trade deficit with Japan.

The US would like to see increase US beef exports while Japan said the trade talks will only cover goods only and not agriculture.

It will be interesting to see how the talks proceed – Japan is already a party to the 11-member agreement formerly known as the Trans Pacific Partnership along with an economic partnership agreement with the EU.

CPTPP invites other nations to join.

white furred animals on green grass field

Photo by Gabriel Peter on Pexels.com

The 11 countries that are part of the “Comprehensive and Progressive Trans-Pacific Partnership (CPTPP)” (formerly known as the Trans-Pacific Partnership), have agreed to expand the trade agreement and are seeking involvement of other Pacific nations.

Last week, the first meeting of the CPTPP was held in Tokyo where Ministers and Officials from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam were in attendance.

The CPTPP issued a statement welcoming any new countries that can “meet CPTPP’s high standards and objectives”.

The CPTPP was enacted in December 2018 and proceeded after the Trump Administration removed the US from the deal. The next CPTPP meeting will be held in New Zealand and starting in 2020, each member nation will take turns hosting a meeting.

Contact our office if you have any questions how the trans-pacific partnership will impact your business. David Hsu, 832-896-6288 or by email at attorney.dave@yahoo.com.

China drafts new technology transfer law – will this be enough to alleviate US concerns?

selective focus photography of motherboard

Photo by Pok Rie on Pexels.com

According to a just published South China Morning Post article – new legislation has been introduced in China that banns forced technology transfers. The draft foreign investment law was revealed on Sunday and includes a clause on protection of intellectual property.

According to the SCMP article, the newest version of the law states that “forced technology transfer through administrative measures is prohibited, and technology cooperation should be “based on voluntarily agreed terms and business practices”.

A similar law was written in 2015 but was not enacted at that time. However, given the US/China trade war and one of the main concerns on forced technology transfer – 2019 may see an enactment of the new law. Will update this article as more news peoples available.

If you have any questions regarding, trade, import, export, compliance or FCPA issues and how they may impact your business, contact experienced compliance attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

US-China Trade Deadline – March 1, 2019.

mountains clouds historical great wall of china

Photo by Manuel Joseph on Pexels.com

As reported by the Guardian, over the weekend, Robert Lighthizer appeared on TV and spoke regarding several trade issues:

  1. The Trump administration is set to impose further duties on Chinese goods on March 1, 2019 if a trade deal is not reached. The March 1st deadline marks the end of 90 days starting December 1 of this month.
  2. The US Trade Representative, Robert Lighthizer was chosen by Trump to negotiate the trade deal and Lighthizer told CBS’s Face the Nation that March 1, 2019 is “a hard deadline”.
  3. In other news, at Trump’s last meeting with Chinese President Xi Jinping, both sides announced a truce and delay in the scheduled January 1, 2019 increase in tariffs to 25% from 10% on approximately $200 billion of Chinese goods.
  4. In response to last Monday’s arrest of Huawei’s CFO, Lighthizer indicated the two issues are separate (trade on one side and law enforcement on the other side).
  5. Lighthizer indicated that part of the negotiations require China to increase purchases of US goods along.
  6. Other requirements for China would be changes to the rules requiring American firms to provide technology to Chinese partners as a condition of doing business.

Check back for more information as it becomes available. Also, if you have any goods scheduled under “List 3” and have questions about what the delay may mean to your imports under List 3, feel free to give me a call, 832-896-6288 or email at attorney.dave@yahoo.com.

 

Trump may end special trade status with Hong Kong

skyline photography of hong kong city

Photo by Jimmy Chan on Pexels.com

According to Bloomberg – the U.S-China Economic and Security Review Commission recommended Congress to reassess Hong Kong’s special trading status for sensitive US technology imports. Since 1992, the US-Hong Kong Policy Act of 1992 treats Hong Kong as fully autonomous for trade and economic matters even after Hong Kong was returned to China in 1997. As such, Hong Kong has not been impacted by the current China tariffs and is also supported by the US in the WTO.

The report indicated that Beijing’s actions toward Hong Kong “continue to run counter to China’s promise to uphold Hong Kong’s autonomy”. The report further states that President Trump could issue an executive order suspending these privileges to Hong Kong if he believes Hong Kong is not autonomous from Beijing.

If President Trump were to revoke the special trade status with Hong Kong regarding exports of dual-use technology (technology that can be used by consumers and the military) to Hong Kong.

The Bloomberg article quoted Hong Kong legislature member, Felix Chung: “The Western community would look at Hong Kong with different eyes and may not even trust Hong Kong. The business sector cannot take this kind of risk.”

Will follow up with more updates if and when available.

Democrats demand changes to USMCA.

pexels-photo-93398.jpeg

According to Bloomberg – several Democrat lawmakers demand changes be made to the USMCA before they will support the new agreement to replace NAFTA. These changes will likely need to be negotiated if approval can occur as Democrats have new clout after seizing control of the House of Representatives following the midterm elections earlier this month.

The new USMCA agreement was reached at the end of September and one part of the agreement strengthens independent unions but some Democrats say the method to enforce the rules is inadequate.

Other terms of the agreement require at least 40% of car production to come from factors paying a way of $16 per hour or higher while also allowing the US greater access to Canada’s dairy market.

Bloomberg cites that Democrats may not want to give Trump a deal leading into the 2020 elections while Trump could withdraw the US from NAFTA if the Democrats do not work with him. Check back for more details as they become available.

Feel free to contact David Hsu to see how the new USMCA may impact your business: (832) 896-6288 or by email at attorney.dave@yahoo.com.