Suzanne Kane and Josh Teitelbaum Quoted in Sourcing Journal on Preparing for USMCA

Sourcing Journal has quoted Akin Gump international trade partner Suzanne Kane and public law and policy senior counsel Josh Teitelbaum in the article “USMCA Could Bring Mexican Factories Under Scrutiny.” The two spoke at a recent webinar hosted by the United States Fashion Industry Association (USFIA) webinar, “Are You Ready for USMCA?”

Kane noted that several points of the trade agreement between the United States, Mexico and Canada pertaining to fashion brands and retailers have not been officially published by Customs & Border Patrol, so some documents and filings that importers need to prepare can’t be completed. “They have less than a month to publish those, so keep a close eye out for them,” she said, referring to the July 1 effective date.

Teitelbaum then outlined some of the key differences changes between USMCA and NAFTA. “Importantly, there is no change in market access, as duties remain at zero for textiles, apparel and footwear,” he said. There are some “modest changes,” though, with regard to rules of origin, he said, mostly with restrictions on third-party input. With regard to tariff preference levels, Teitelbaum said USMCA lowers the caps for incoming apparel, but the impact “should be minimal.”

Labor enforcement will be a big part of the USMCA, said Teitelbaum, with “a far more active enforcement regime in place” and changes to Mexican labor law “that are truly transformational.”

It remains to be seen whether USMCA will become “a model” for other upcoming trade negotiations, added Teitelbaum. “U.S.-Kenya is up next, along with U.S.-U.K.,” he said. “They both present some very different questions for textile negotiation and we’ll see if USMCA has any sort of precedential value in those negotiations.”