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Trade groups representing industries ranging from retail and consumer brands to auto parts, textiles and apparel are urging the Trump administration to quickly renew the U.S.-Mexico-Canada agreement and pursue sector-specific improvements.
Officials from multiple agencies testified at the U.S. Trade Representative’s hearing in Washington, Dec. 3-5. USTR also collected public comments in preparation for next year’s six-year review of the USMCA.
Trade associations are seeking industry-specific revisions to the tripartite agreement while still agreeing on several key priorities.
Most supported a prompt extension of the USMCA to ensure duty-free treatment of conforming goods. Many also supported expanding the duty-free list to include items not available in the three countries. They also called on the three governments to better coordinate their regulatory, legal and safety requirements, apply more uniform standards in the investigation and resolution of disputes, and follow clearer and more consistent rules.
Canada and Mexico are big markets for America [consumer packaged goods]And ensuring continued duty-free trade in USMCA-compliant goods and renewed trilateral cooperation is critical to continued growth and success, said Tom Maderkey, vice president of supply chain at the Consumer Brands Association.
Specifically for the CPG industry, Madrecki called for stricter and more consistent application of rules of origin for highly modified products such as cocoa and coffee.
For the automotive sector, Flavio Volpe, president of the Auto Parts Manufacturers Association, called for simplifying rules of origin, clarifying EV-era definitions for key parts and labor value content, and allowing a transition period until North American battery and mineral capacity increases.
Other items on Volpe’s list include digital customs harmonization, faster dispute resolution and explicit recognition of tools as content of regional value.
“Finally, I want to state for the record: USMCA-compliant goods should not be subject to Section 232 tariffs,” Volpe said. “They raise costs for American manufacturers and undermine the unified North American platform that makes American automakers globally competitive.”
Retail, apparel, textile wish list
Retailers want the next USMCA to recognize components of the Dominican Republic-Central America-US Free Trade Agreement (CAFTA-DR) for core purposes, said Sang Chang, vice president of international trade at the Retail Industry Leaders Association.
“We believe this can help support close friend support efforts and accelerate supply chain integration,” Chang said.
Other issues that need to be addressed include Mexico’s lack of transparency and inconsistent enforcement of customs procedures, Chang said. The Canada Border Services Agency’s revenue assessment and management system also needs improvement.
“We will support more trilateral cooperation on customs, including the establishment of customs modernization programs,” Chang said.
Kathryn White, vice president of policy at the National Council of Textile Organizations, called on the administration to extend tax exemptions for products originating in CAFTA-DR countries, given the vital textile and apparel co-production relationship between the United States and CAFTA-DR countries.
According to White, the NCTO is also seeking targeted amendments to the yarn’s rule of origin to allow U.S. manufacturers to receive duty-free treatment if they source non-permitted input sources in the block, such as acrylic. The Yarn Forward Rule requires that the yarn used to produce a textile or apparel product originates in a USMCA country and that all subsequent manufacturing processes take place in one of the countries. However, fibers can be obtained from anywhere.
The group also calls for stronger enforcement to combat customs fraud and prevent the removal of USMCA benefits by third countries.
“We are proposing that Canada and Mexico publicly share trade data to aid efforts to identify fraudulent imports and punish repeat offenders to the highest degree,” White said. US Customs and Border Protection also needs to increase domestic enforcement and increase transparency and accountability in its enforcement activities.
Beth Hughes, vice president of trade and customs policy at the American Apparel and Footwear Association, advocated merging the USMCA with other FTA partners.
The merger “creates a virtual web among key U.S. trading partners without allowing textile, apparel and footwear products using third-country inputs to enjoy the benefits of the USMCA agreement,” Hughes said.
Editor’s note: This story was first published in our weekly logistics newsletter. Register here.
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