September NAFTA Renegotiation Update

Transcription

1 September NAFTA Renegotiation Update Hosted by United States Fashion Industry Association (USFIA) and Akin Gump Strauss Hauer & Feld LLP September 28, :00 P.M. Eastern/11:00 A.M. Pacific

2 Do you have a question? During the webinar, all attendees will be assigned to listenonly mode. Please use the Questions box on your dashboard to ask a question during the webinar.

3 NAFTA: Where We Stand Today Hosted by the US Fashion Industry Association and Akin Gump Strauss Hauer & Feld LLP September, 28, Akin Gump Strauss Hauer & Feld LLP

4 NAFTA: Where We Stand Today Introduction Third Round Review Upcoming Rounds Preview Question and Answer 3

5 NAFTA: Where We Stand Today Justin McCarthy Akin Gump Joshua Teitelbaum Akin Gump 4

6 Third Round Review Ministers Closing Statements USTR Ambassador Lighthizer: There is an enormous amount of work still to be done, including some very difficult and contentious issues, and the US continues to push for ways that will reduce the trade deficit Canadian Minister Freeland: It s true we have not yet received some proposals from the U.S. on important issues. But I think we all have to understand that this is a highly accelerated process We re making progress on a number of bread and butter trade issues which matter to Canadian businesses Mexican Minister Guajardo: Negotiators will have substantial challenges to work on. 5

7 Third Round Review Congressional Timeline Trade Remedy Notification: On Sept. 22, 2017, USTR notified Congress about potential changes to trade remedy law, starting 180-day clock before POTUS can sign a new agreement that can then be considered by Congress. Earliest Congress can consider a renegotiated NAFTA is now March 21, Not All Texts Tabled Yet: Despite goal of tabling text for all chapters by end of this round, some chapters remain without tabled text. These include proposals on: Investor-State Dispute Settlement Currency Manipulation Auto Rules of Origin 6

8 Third Round Review Hot Issues Sunset Clause: though not yet tabled, would propose giving the POTUS ability to withdraw from NAFTA in five years based on a review of the trade deficit. Chapter 19: USTR s trade remedy notice to Congress proposed eliminating the panels that resolve AD/CVD disputes between NAFTA parties. Regional Trade Remedies: USTR s trade remedy notice also indicated that USTR plans to table a proposal to change AD/CVD methodologies to allow for claims by regional (rather than national) producers, supported by FL and GA agriculture sectors. Government Procurement: USTR proposes to exempt sub-federal contracting and to create a reciprocal allotment for US federal contracts so that MX and CA would be allowed to bid on contracts based on the amount of access that US firms have to federal contracts in MX and CA. Intellectual Property (IP): The US tabled text on IP that favors the content industry at the expense of the tech community. This risks losing the support of Senator Ron Wyden (D-OR), who is one of the Big 4 as Ranking Member of the Senate Finance Committee and who championed the tech community s issues in this chapter during TPP negotiations. Labor: USTR tabled text similar to TPP, but was criticized by unions and Democratic lawmakers as insufficient 7

9 Third Round Review The Evolution of Textiles Chapter Negotiating Objectives TPA Principal Negotiating Objective (July 2015): obtain competitive opportunities for US exports of textiles and apparel in foreign markets substantially equivalent to the competitive opportunities afforded foreign exports in US markets and to achieve fairer and more open conditions of trade in textiles and apparel. Trump Specific Negotiating Objective (July 2017): Maintain existing duty-free access to NAFTA country markets for US textile and apparel products and seek to improve competitive opportunities for exports of US textile and apparel products while taking into account US import sensitivities. NCTO Recommendation: (June 2017): Eliminate the TPL system for all parties Retail and Apparel Association Letter (Sept 2017): our strongly shared view is that the existing [TPLs] be fully retained. 8

10 Third Round Review The NAFTA Tariff Preference Levels (TPLs) USTR NAFTA 2.0 Proposal (Sept 2017): USTR proposed to eliminate all TPLs and instead included placeholder text for a short supply list to be added later. An opening bid or firm position? There are 24 separate and limited TPLs in NAFTA total (12 apparel/6 fabrics/6 yarns) Products Cap from MX into US Utilization (2017)* Cotton or MMF Apparel 45,000,000 SME 100% Wool Apparel 1,500,000 SME 80% *CBP Quota Status Report Sept Products Cap from US into CA Utilization (2016)* Cotton or MMF Apparel 9,000,000 SME 100% Wool Apparel 919,740 SME 49% Fabrics 2,000,000 SME 0% Yarns 1,000,000 KGM 46% *Canadian Dept of Foreign Affairs and International Trade Sept

11 Upcoming Rounds Preview Future Schedule Detailed: Round 4: Washington, D.C. October Hot Issues For Upcoming Rounds: Intellectual Property Sunset Clause Chapter 19 Trade Remedies Labor Textiles Chapter TPLs Sewing Thread Visible Linings Narrow Elastics 10

12 Questions & Answers Justin McCarthy Joshua Teitelbaum 11

13 Q u e s t i o n s? Please use the Questions box on your dashboard on the right side of your screen. C o n t a c t u s a f t e r t h e w e b i n a r : info@usfashionindustry.com Phone: