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1 1 (December 18, 2019)

handle is hein.crs/goveatv0001 and id is 1 raw text is: USMCA: Amendment and Key Changes December 18, 2019 Overview On December 10, 2019, the United States, Canada, and Mexico agreed to a protocol of amendment to the proposed U.S.-Mexico-Canada Agreement (USMCA). The amendments include modifications to key elements of the original text in regard to dispute settlement, labor and environmental provisions, intellectual property rights (IPR), and steel and aluminum requirements in the rules of origin for autos. On December 13, the Trump Administration submitted to Congress the proposed USMCA implementing legislation, which also reflects the recent amendments. On the same day, the United States-Mexico-Canada Implementation Act (H.R. 5430) was introduced in the House of Representatives. On December 16, the bill was introduced in the Senate (S. 3052). U.S. Trade Representative (USTR) and some Members of Congress negotiated proposed changes to the USMCA. USTR then negotiated the amendments with USMCA parties. Mexico was the first country to ratify the agreement in June 2019 and approve the amendments by a 107-1 vote in the Mexican Senate on December 12. Canada has not ratified the agreement. Congress is expected to consider USMCA under TPA rules, which is the time-limited authority that Congress uses to consider implementing legislation for trade agreements under expedited procedures, provided that they meet certain statutory requirements. Under TPA, Congress has a maximum of 90 legislative days to vote on the agreement. Dispute Settlement Some Members of Congress criticized the 1994 North American Free Trade Agreement (NAFTA), and subsequent USMCA, for an ineffective dispute settlement process. The NAFTA mechanism was used for 3 cases in its 25-year history, the last in 2000. The amended USMCA includes the following: Panel Blocking. The revisions prevents the ability of a party to block establishment of a dispute settlement panel by ensuring the formation of a panel in cases where a party refuses to participate in the process of selecting panelists. Rules of Procedure. The amendment revises the guidelines for the Rules of Procedure for panels to give the parties the right to submit testimony, the right to test the veracity of submitted testimony, the right to submit anonymous testimony, and for the panel to accept agreed stipulations prior to a hearing, among other issues. Free Trade Commission. The revised language dispute process by eliminating the consultative role of the USMCA Free Trade Commission, which acts as a secretariat for the agreement, as an intermediate step to resolve disputes. Labor USMCA revised NAFTA by adding more enforceable labor provisions and an annex with Mexican commitments to reform its labor laws and practices. Numerous policymakers remained concerned about enforcement and the full implementation of Mexican labor reforms. Amendments to USMCA include the following: In a Manner Affecting Trade and Investment. Original provisions required a party to prove a violation regarding worker rights occurred in a manner affecting trade and investment. The amendment shifts the burden of proof by stating that a panel shall presume a violation affects trade and investment unless otherwise demonstrated. Forced Labor. Text on forced labor commitments was changed by removing language that a party could adopt measures it considered appropriate to stop the importation of goods produced by forced labor. The modified language is intended to close what some saw as a possible loophole. Violence Against Workers. Language that a party would have to prove that a violation was in a sustained or recurring pattern was removed. In addition, the amended agreement shifts the burden of proof to the responding party by stating that a panel shall presume that a failure to comply affects trade or investment unless the responding party demonstrates otherwise. Rapid Response Mechanism. A new rapid-response mechanism would provide for an independent panel investigation at covered facilities, as opposed to a government inspection, for suspected denial of the right of free association and collective bargaining. For the United States, covered facilities would be limited to those that have previously been proven to have violated U.S. law. For Mexico, a claim can be brought only with respect to an alleged worker rights violation under Mexico's labor reform commitments under USMCA. Violations could result in a suspension of preferential tariffs or potential penalties on goods manufactured at or services provided by the covered facility. Mexico's Labor Reform Monitoring. USMCA implementing legislation creates a new interagency committee and reporting requirements to Congress on Mexico's implementation of labor reforms. Also establishes key benchmarks for Mexico's implementation processes and for labor attaches based in Mexico. ,ittps://crsreports~congress.gov

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