Coalition for Prosperous America Wants Quota-Limited North American Trade
The Coalition for a Prosperous America, whose first CEO joined the Office of Management and Budget as associate director for economic policy (see 2502240005), is calling for replacing USMCA with two bilateral trade agreements. The CPA submitted comments for the USMCA six-year review.
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"The United States must fundamentally restructure its North American trade architecture to defend its sovereignty, industries, and workers," the group wrote. It said the U.S.-Mexico agreement needs to rely on tariff rate quotas and "strict oversight of Chinese investment and transshipment." It said the U.S.-Canada agreement should have quotas set steel and aluminum trade levels from the years 2015-17, and "automatic 232 reactivation or hard caps if exceeded." It also said that there should be automatic countervailing duty review of aluminum, lumber, produce and beef exports if exports expand in any of those sectors, and it says that greenhouse grants, stumpage fees and hydroelectric power in Quebec and British Columbia are all industrial subsidies.
It said TRQs work. "The history of U.S. sugar trade shows how a transition away from free trade to managed trade can achieve effective results for U.S. producers," the CPA wrote.
"Canada is a problematic trade partner," the CPA wrote. "The U.S.-Canada relationship must evolve from assumption of trust to structured reciprocity and built-in protections for U.S. producers."
The CPA complained that the tighter auto rules of origin did not protect U.S. jobs. "The benefits of the 'North American' preference flow overwhelmingly to Mexican manufacturers," they asserted, since average manufacturing wages in Mexico are $2 to $6 an hour, and U.S. averages are $20 to $27 an hour.
They also argued that the Section 232 action against medium- and heavy-duty trucks should not allow Mexican parts to enter the U.S. duty-free if they meet rules of origin under USMCA. "The United States should administer managed access through tariff-rate quotas (TRQs) for core parts within HTS 8708, including aluminum chassis and body assemblies. TRQ levels should be calibrated to current U.S. capacity and reviewed periodically as domestic supply develops," the CPA wrote.
They complained that Mexican-assembled trucks are about half of Class 8 truck sales.