presentación de powerpoint - amcham · each annex includes provisions that exceed nafta 1.0 and...

NAFTA Update

August 28th, 201811:00 am

On August 27th, 2018, the governments of the USA and Mexico announced that both parties have

reached an agreement on elements of the North American Free Trade Agreement (NAFTA), marking

a significant step toward reshaping the trade deal.

Canadian Foreign Minister, Chrystia Freeland, will arrive today to Washington D.C. to restart

official talks with the United States seeking to reach an agreement.

Further updates on the matter are expected, following Canada's reintegration to the talks.

Introduction

*Trump Reaches Revised Trade Deal With Mexico. The New York Times. Consulted: 28/08/2018. https://www.nytimes.com/2018/08/27/us/politics/us-mexico-nafta-deal.html

https://www.nytimes.com/2018/08/27/us/politics/us-mexico-nafta-deal.html

This deal uses trade rules to drive higher wages by requiring that 40-45% of auto content be madeby workers earning at least $16 USD per hour.

55-60% of the automotive production could be manufactured with a labor cost lower than 16 USDas a minimum wage, as is the case of Mexico.

• For the companies that can fulfill it from the beginning, a 0 rate tariff will be applied. Thosecompanies with newly installed production sites will be able to export at a rate of 2.5% whilemaking the necessary adjustments to adapt to the new rules.

Requirement: 75 percent of auto content be made in the United States and Mexico. (Rules oforigin)

The US and Mexico have agreed to stronger rules of origin that exceed those of both NAFTA 1.0 andthe Trans-Pacific Partnership (TPP), including for autos and automobile parts and other industrialproducts such as chemicals, steel-intensive products, glass, and optical fiber.

*UNITED STATES–MEXICO TRADE FACT SHEET: Rebalancing NAFTA to Support Manufacturing. Office of the United States Trade Representative. Consulted: 28/08/2018. https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/rebalancing-nafta-support

Automotive Industry

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/rebalancing-nafta-support

The agricultural seasonality proposed at the beginning by the US is ruled out.

Tariffs on agricultural products traded between the US and Mexico will remain at zero.

Biotechnology: the text covers all biotechnologies, including new technologies such as geneediting, whereas the TPP text covered only traditional rDNA technology. Specifically, the US andMexico have agreed to provisions to enhance information exchange and cooperation onagricultural biotechnology trade-related matters.

Both countries, agreed to several provisions to reduce the use of trade distorting policies, including:

• To not use export subsidies or WTO special agricultural safeguards for products exported to eachother’s market.

• Improved commitments to increase transparency and consultation regarding the use of exportrestrictions for food security purposes.

• If supporting producers, to consider using domestic support measures that have minimal or notrade distorting or production effects and ensure transparency of domestic support and supplymanagement programs.

*UNITED STATES–MEXICO TRADE FACT SHEET: Modernizing NAFTA to be a 21st Century Trade Agreement. Office of the United States Trade Representative. Consulted: 28/08/2018. https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/modernizing-nafta-be-21st-century

Agriculture

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/modernizing-nafta-be-21st-century

Agree on geographical indication standards:

Enhance transparency for opposition and cancellation proceedings for geographical indications (GIs).

Establish a mechanism to consult on GIs pursuant to international agreements.

Allow for additional factors that may be taken into account in determining whether a term is acommon name instead of a GI.

Agreed to not restrict market access in Mexico for U.S. cheeses labeled with certain names.

Disciplines related to cheese compositional standards.

*UNITED STATES–MEXICO TRADE FACT SHEET: Strengthening NAFTA for Agriculture. Office of the United States Trade Representative. Consulted: 28/08/2018. https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/strengthening-nafta-agriculture

Geographical Indications

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/strengthening-nafta-agriculture

Agreement on labeling and certification provisions that will help the countries avoid barriers totrade in wine and distilled spirits.

Mexico agreed to continue recognition of Bourbon Whiskey and Tennessee Whiskey as distinctiveproducts of the United States.

The United States agreed to continue recognition of Tequila and Mezcal as distinctive products ofMexico.

*UNITED STATES–MEXICO TRADE FACT SHEET: Strengthening NAFTA for Agriculture. Office of the United States Trade Representative. Consulted: 28/08/2018. https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/strengthening-nafta-agriculture

Alcoholic Beverages

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/strengthening-nafta-agriculture

Chapter 11 is maintained to give certainty to the Treaty.

Chapter 20 is maintained as originally contemplated in NAFTA.

Chapter 19 was opened to integrate Canada.

The safeguarding of compensation mechanisms was ensured and disciplines were defined.

Dispute Resolution



Maintains duty-free treatment for originating goods.

Maintains the prohibition on export duties, taxes, and other charges and the waiver of specificcustoms processing fees.

Adds new provisions for transparency in import licensing and export licensing procedures.

Prohibits Parties from applying:

Requirements to use local distributors for importation;

Restrictions on the importation of commercial goods that contain cryptography;

Import restrictions on used goods to remanufactured goods; and

Requirements for consular transactions and their associated fees and charges.

Updates provisions for duty-free temporary admission of goods to cover shipping containers orother substantial holders used in the shipment of good.


Market Access for Goods


Any trade agreement will require all of the following:

Enforcement authorities must be able to stop goods that are suspected of being pirated or counterfeited atall areas of entry and exit.

Enforcement against counterfeits and piracy occurring on a commercial scale.

Meaningful criminal procedures and penalties for camcorder piracy.

Civil and criminal penalties for satellite and cable signal theft.

Broad protection against theft of trade secrets, including against state-owned enterprises.

Protection for innovators:

Provide strong patent protection for innovators by enshrining patentability standards and patent office toensure that innovators, including small- and medium-sized businesses, are able to protect theirinventions with patents.

Include strong protection for pharmaceutical and agricultural innovators.


Intellectual Property


The new intellectual property chapter will also:

Require full national treatment for copyright and related rights so United States creators are not deprivedof rights in foreign markets that domestic creators receive.

Extend the minimum copyright term to 75 years for works like song performances and ensure that workssuch as digital music, movies, and books can be protected through current technologies such astechnological protection measures and rights management information.

Establish a notice-and-takedown system for copyright safe harbors for Internet service providers (ISPs) thatprovides protection for IP and predictability for legitimate technology enterprises who do not directlybenefit from the infringement, consistent with United States law.

Provide important procedural safeguards for recognition of new geographical indications (GIs), includingstrong and comprehensive standards for protection against issuances of GIs that would prevent UnitedStates producers from using common names.

Enhance provisions for protecting trademarks, including well-known marks, to help companies that haveinvested effort and resources into establishing goodwill for their brands.


Intellectual Property


Requires the Parties to adopt and maintain in law and practice labor rights as recognized by theInternational Labor Organization, to effectively enforce their labor laws, and not to waive orderogate from their labor laws.

New provisions to take measures to prohibit the importation of goods produced by forced labor, toaddress violence against workers exercising their labor rights, and to ensure that migrant workersare protected under labor laws.

Includes an Annex on Worker Representation in Collective Bargaining in Mexico, under whichMexico commits to specific legislative actions to provide for the effective recognition of the rightto collective bargaining.


Labor


Environment obligations include:

Prohibitions on some of the most harmful fisheries subsidies, such as those that benefit vessels oroperators involved in illegal, unreported, and unregulated fishing.

New protections for marine species like whales and sea turtles, including a prohibition on shark-finning and commitment to work together to protect marine habitat.

Obligations to enhance the effectiveness of customs inspections of shipments containing wild faunaand flora at ports of entry, and ensure strong enforcement to combat IUU fishing.

First-ever articles to improve air quality, prevent and reduce marine litter, support sustainable forestmanagement, and ensure appropriate procedures for environmental impact assessments.

Robust and modernized mechanisms for public participation and environmental cooperation.


Environment


Commitments to liberalize financial services markets.

Prohibition of a Party from imposing certain quantitative and numerical restrictions that would limitthe business of financial services suppliers.

Ensure good regulatory practices in government licensing and other market access authorizations.

Specific procedures related to investor-State dispute settlement claims with Mexico, includingprovisions regarding expertise of arbitrators and a special procedural mechanism to facilitate theapplication of the prudential exception and the other exceptions.


Financial Sevices


Prohibit customs duties and other discriminatory measures from being applied to digital productsdistributed electronically (e-books, videos, music, software, games, etc.).

Ensure that data can be transferred cross-border, and the limits where data can be stored andprocessed are minimized.

Ensure that suppliers are not restricted in their use of electronic authentication or electronicsignatures, thereby facilitating digital transactions.

Guarantee that enforceable consumer protections, including for privacy and unsolicitedcommunications, apply to the digital marketplace.

Limit governments’ ability to require disclosure of proprietary computer source code andalgorithms.

Promote collaboration in tackling cybersecurity challenges.

Promote open access to government-generated public data.


Digital Trade


The agreement contemplates new commercial provisions in specific manufacturing industries:

• Information and communication technologies

• Pharmaceuticals

• Medical devices

• Cosmetics Products

• Chemicals Substances

Each annex includes provisions that exceed NAFTA 1.0 and the TPP and promote improvedregulatory compatibility, better regulatory practices, and increased trade.


Sectoral Annexes


The Treaty will have a minimum validity of 16 years.

It will be reviewed every 6 years without the possibility of terminating it until the end of the term.

If an agreement on the continuity of certain topics is not reached during the first review, a yearlyrevision will be scheduled to ensure that these issues are resolved and agreed upon.

NAFTA’s Validity



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