Dear Members and Friends:
Hope you are well and staying safe.
A number of activities have taken place in the past few weeks that we would like to report to you.
First, on Section 232, the US on September 15 called a tariff truce with Canada, lifting its 10 percent levy on unwrought, or P1020, aluminum just hours before Ottawa was to unleash a suite of countermeasures. The US will resume duty-free treatment to September 1, and the next four months will be closely monitored. According to the USTR, “If actual shipments exceeded 105 percent of the expected volume for any month during the four-month period, then the United States will impose the 10 percent tariff retroactively on all shipments made in that month.” Despite the easing of the pressure right now, aluminum trade between the US and Canada will be an ongoing issue going forward.
On Brexit negotiations between the UK and the EU, this past week the last scheduled talks were held between negotiators on a Brexit trade and security deal. Only 90 days remain until the end of the transition period, when Britain will leave the EU’s economic system, deal or no deal. According to EU leaders, there has been “progress on many, many different fields” but the most difficult questions were “still completely open.” The areas of difficulty remain fisheries, dispute settlement, and state support for companies. The EU says the ultimate deadline is late October, although this could stretch into the first half of November. In the final six weeks of the year, the 1,000-plus-page treaty – yet to be agreed – has to be finessed by lawyers, translated into all 24 EU languages, inspected by 27 EU governments (and some of their legislatures), then ratified by the UK and European parliaments.
Samson Atlantic provided an excellent presentation two weeks ago on “The New European Union: How Brexit Resets the US-EU Relationship." It is worth a look as it provides a glimpse of the EU going forward.
A number of items on Mexico: Valeria Moy of the Institute for Mexican Competitiveness provided a look at “The Mexican Economy in Times of COVID: Effects and Perspectives.” This sobering report was given as part of a Wilson Center webcast on “The Pandemic in Mexico: The Scope of the Tragedy.” Two newsletters are attached from Business Development Partners and Monarch Global Strategies. (Monarch is chaired by James Jones, former US Ambassador to Mexico and former Member of the House of Representatives). Although Mexico remains the US’s #1 trading partner, Citibanamex, the Mexican subsidiary of US bank Citibank, projects that Mexico’s GDP will not return to pre-COVID levels until 2025. Key issues from the newsletters going forward are economic, political, and the coronavirus.
The US-Mexico Chamber has re-established its North American Working Group (NAWG), which has the objective of exploring in depth the opportunities that the USMCA brings to the different industries and identifying challenges for which we must prepare. The NAWG aims at making a positive contribution to the process of implementation ahead by establishing a constructive dialogue with US and Mexico government authorities. The results of the first meeting with Mexico’s Senate Commission for the Implementation of the USMCA was held on September 4 are available here. We will keep you all updated on future sessions.
Lastly, our Mid-America Chapter will be holding a webinar on “The North America Trading Bloc in a World of Globalization” next Thursday, October 8, from 9:30 to 10:45 a.m. CDT. Registration information can be found here.
Keep in touch with us at www.usmcocma.org.