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COVID, USMCA, Mexican Corn – The Trading Room – Economic Newsletter

17 Apr , 2020  

Download our newsletter, The Trading Room, in the following link Trading Room -17042020

COVID: USMCA and Rules of Origin

This week it was reported in news outlets that industries in the region are seeking to postpone the entry into force of the USMCA automotive rules of origin; that is, to establish a transition period for said rules after USMCA’s entry into force.

 

USMCA’s entry into force remains a pending issue. So far, the US has not notified the completion of its internal procedures to trigger the 3 months term for its entry into force. However, it is said that it will take effect in mid-July or no later than September 1, which implies notification within the following weeks or months.

 

The region’s auto industry is concerned that rules of origin (RoO) will apply immediately with USMCA’s entry into force; regional content requirements will increase progressively. For this reason, 10 legislators in the US delivered a letter to the US Trade Representative (USTR) requesting “flexibility” and an adjustment period because COVID affected production in the region, complicating compliance with RoOs. In this regard, President Trump acknowledged last weekend that the agreement is different from the point of view that production will be lower.

 

In the case of Mexico, the president of the National Association of Buses, Trucks, and Tractor-trucks Producers (ANPACT), commented that “the complexity of complying with the origin regulations lies in the fact that for each component of a vehicle, calculations of regional content, the labor component, steel, and aluminum. In the case of an engine, they have approximately 700 suppliers, so meeting these requirements can take months.”

 

 

Furthermore, USMCA’s Uniform Rules are still being negotiated.

USMCA and the Law on Native Corn

On Monday the Federal Law for the Promotion and Protection of Native Corn was published in the Official Gazette of the Federation.

In essence, this law provides the following:

i) The production, marketing, consumption and constant diversification of native corn is recognized as a national cultural manifestation, and

ii) access to Native Corn is guaranteed without genetically modified organisms.

Since 2019, this law is somewhat controversial because it seeks to protect Mexican Native Corn from Mexico’s USMCA commitments to adhere to the International Convention for the Protection of New Varieties of Plants (UPOV 1991), Mexico is a party to said Convention but according to the 1978 Act. These conventions authorize the registration of patents on plant genes and varieties. However, UPOV 1991 extends rights to holders of such patents as compared to UPOV 1978.

 

Regardless of the above, we highlight that this law does not introduce restrictions on the importation of any type of corn into national territory.

VTZ contributed with Thomson Reuters Practical Law

 

For the third year, VTZ contributed Thomson Reuters Practical Law in the Guide to International Trade in Goods and Services in Mexico. Our Managing Partner, Adrian Vázquez, Junior Partner, Emilio Arteaga, and Associate, Mariana Malváez, answered a guide on key issues of international trade regulation in Mexico. Check the Guide here.

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English, News

USMCA developments and Mexico-China Business Forum – The Trading Room

20 Dec , 2019  

USMCA, Labor Attachés, Labor Law enforcement, Rapid Response Mechanism,

USMCA in a Week

A few days after the protocol amending USMCA was signed, a new controversy arose between Mexico and the USA at the weekend due to USMCA’s implementing act in the USA. 

In essence, Mexican negotiator, Jesus Seade, wrote a letter stating that Mexico considered that the legislation went “beyond” the protocol since the USA was considering to include “labor inspectors” in Mexico. 

In response, USTR mentioned that the USMCA’s authorized “domestic measures” such as having “Attachés”. In fact, US attachés currently operate in Mexico in different sectors or matters, such as agricultural, commerce, among others.  

How will the US Attachés function?

The existence of a maximum of 5 labor Attachés is planned, according to the USTR response and US legislation. The Attachés “will work with their Mexican counterparts, workers, and civil society groups on implementation of the Mexican labor reform, including by providing technical assistance and disbursing capacity building funds, and provide assistance to the new U.S. government interagency labor committee.” 

Undersecretary Seade thanked the “clarity” of USTR’s response, considered that the Attachées will be 90% harmless and pointed out that the Attachées would abide by Mexican law.

Rapid Response Mechanism

The Modification Protocol to USMCA provides for Facility-Specific Rapid Response Labor Mechanism, which will operate independently.

Our labor expert, Rafael Alday, prepared an alert (only available in Spanish), addressing this mechanism briefly.

Under this context, it is clear that Mexico will have comprehensive monitoring of compliance with labor laws, particularly on unions and collective bargaining rights. In the same vein, Ricardo Ramírez, a former member of the WTO Appellate Body, said that never before a system so intrusive and with strict surveillance of labor legislation in another country had been established.

A Strong First Step

On Tuesday, the USMCA implementation act was approved by the Committee on Ways and Means of the House of Representatives, meanwhile, the House approved the act yesterday. Now, the Senate needs to vote on the act, but this will occur after the impeachment process that US President Donald Trump is facing according to media outlets.

The Mexican Minister of Economy mentioned in Twitter that the US Senate will vote on January 2020.  

Sources:

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/december/ustr-responds-mexico-usmca

https://www.eluniversal.com.mx/opinion/ricardo-ramirez-hernandez/t-mec-me-acabo-de-enterar

https://elfinanciero.com.mx/economia/camara-de-representantes-de-eu-ratifica-el-t-mec

 

Mexico-China Business Forum

This Monday, VTZ and Adrián Vázquez participated in the Mexico-China Economic and Commercial Cooperation Forum organized by the Mexican Business Council for Foreign Trade, Investment and Technology (acronym COMCE) and the Chinese Council for the Promotion of International Trade (CCPIT). Detailed information about the plenary is available here.

 

Sources:

https://www.jornada.com.mx/ultimas/economia/2019/12/16/abriran-oficina-de-enlace-entre-empresarios-chinos-y-mexicanos-4595.html

 

Download in PDF:The Trading Room

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News

USMCA, el Nuevo TLCAN.

1 Oct , 2018  

Después de más de un año de intensas negociaciones, la noche de ayer, 30 de septiembre, los EEUU y Canadá llegaron a un acuerdo para la renovación del Tratado de Libre Comercio de América del Norte (TLCAN). El nombre del nuevo acuerdo comercial será United States-Mexico-Canada Agreement (USMCA).

 

El texto del acuerdo se encuentra disponible en la página del United States Trade Representative (USTR) para conocerlo da clic aquí .

Como resultado del acuerdo alcanzado entre los EEUU y Canadá, el Subsecretario de Comercio Exterior de la Secretaría de Economía, Juan Carlos Baker entregó la noche de ayer el texto del nuevo acuerdo al Senado para comenzar con el proceso de revisión ante las comisiones involucradas. El proceso de revisión ante el Congreso de los Estados Unidos concluirá aproximadamente en 60 días, requisito indispensable para que el presidente Trump pueda firmar un TLC, y será firmado por los respectivos jefes de Estado durante los últimos días del mes de noviembre.

En los próximos días VTZ publicará un documento de trabajo analizando el USMCA.

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News

VTZ TRADING ROOM – 31/08/2018

31 Aug , 2018  

This week on The Trading Room:

  • NAFTA: What about Canada?

An “Agreement in Principle” between US and Mexico was reached this Monday, and President Trump suggested to change the name “NAFTA” to “US-Mexico Trade Agreement” (USMTA). This statement triggered the following doubt: Can the US enter into a bilateral agreement with Mexico? Jennifer HillmanSee more

Want to suscribe to our newsletter? Leave a comment or send us an email.

Esta semana en Trading Room:

  • TLCAN: ¿Y Canadá?

Un “Acuerdo en Principio” entre EEUU y México se logró este lunes, y el Presidente Trump sugirió cambiar el nombre TLCAN por “Acuerdo de Comercio EEUU-México” (ACEUM). Esta declaración creó la siguiente duda: ¿puede los EEUU celebrar un acuerdo bilateral con México? Jennifer Hillman Ver más.

¿Quieres suscribirte a nuestro boletín? Déjanos un comentario o envíanos un correo electrónico.

 

The Trading Room – 31.08.2018

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News

Adrián Vázquez Participa en Mesa de Análisis del TLCAN

8 Aug , 2017  

El pasado viernes 4 de agosto, nuestro socio Adrián Vázquez, participó en la mesa de análisis del Capítulo XIX del Tratado Libre de Comercio de América del Norte, organizado por la Barra Mexicana de Abogados. Este tema se ha vuelto relevante en virtud de que los Estados Unidos desea eliminar el referido capítulo, el cual establece un mecanismo de solución de controversias que permite revisar medidas antidumping y subisidios impuestos por Estados Unidos, Canada o Mexico ante un Panel Bi-Nacional.

En dicha mesa, se discutió el contexto histórico del capítulo XIX, sus problemas y propuestas para mejorarlo. En esta mesa de análisis, participaron los siguientes expertos:

Fila superior  (izquierda a derecha): Gustavo Uruchurtu (abogado), José Manuel Vargas (abogado),Hugo Romero (Secretaría de Economía), Oscar Cruz Barney (panelista), Eduardo Días Gavito (abogado), David Hurtado (abogado)

Fila inferior  (izquierda a derecha): Rodolfo Cruz Miramontes (abogado), Jaime Galicia (abogado) Ricardo Ramírez (ex-miembro del Órgano de Apelación de la OMC) y Adrián Vázquez.

Al respecto, Adrián Vázquez escribió recientemente sobre el capítulo XIX TLCAN, “Ante la Eliminación del Mecanismo del Capítulo XIX TLCAN: ¿Quién podrá defendernos?“, y fue entrevistado por el periódico El Universal en “Amenazan al TLCAN antes de su Negociación

 

 

 

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English, Publications

AFTER CHAPTER 19 NAFTA ELIMINATION: WHO WILL DEFEND US?

25 Jul , 2017  

Our managing partner, Adrián B. Vázquez, comments on Chapter 19 NAFTA and the implications of its possible elimination in light of NAFTA’s renegotiation.

To consult his opinion,  follow the next link: Elimination of Chapter 19 NAFTA – AVB

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Publications

Ante la Eliminación del Mecanismo del Capítulo XIX TLCAN, ¿Quién Podrá Defendernos?

21 Jul , 2017  

Nuestro socio director, Adrián B. Vázquez, comenta sobre el Capítulo XIX TLCAN y las implicaciones de su posible eliminación en virtud de la renegociación del TLCAN.

Para consultar su publicación, favor darle click al siguiente vínculo: Ante la eliminación del Mecanismo del Capítulo XIX -AVB

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