House Bill Would Direct USTR to Negotiate Establishing CFIUS in Mexico, Canada
A bipartisan bill was introduced in the House to ask the U.S. trade representative to push Mexico and Canada to establish an investment screening regime and coordinate on "shared threats from investments in strategically important economic sectors and critical infrastructure in North America."
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The bill's sponsors want the foreign countries to do something similar to the Committee on Foreign Investment in the United States, or CFIUS.
House Ways and Means Committee members Jodey Arrington, R-Texas, and Brad Schneider, D-Ill., co-sponsored the Consistency in Foreign Investment in the USMCA Act, which they publicized Dec. 16.
Their bill is very similar to one introduced in September in the Senate (see 2509220004), but it includes more detailed language.
Where the bipartisan Senate bill said the U.S. should negotiate for "the establishment of a mechanism for USMCA countries to coordinate to address shared threats from investments by nonmarket economy countries," the House bill said they should notify the other USMCA countries of "investments in strategically important economic sectors and critical infrastructure; and identify, consult, manage, and resolve existing or proposed foreign investments in one country determined to pose a national security risk to another USMCA country."
Arrington said in the press release that "Mexico's weak investment standards have created a backdoor for China to move products into the United States tariff-free and allow [Chinese Communist Party]-aligned entities to gain a foothold in industries vital to our national security." The bill "will ensure our North American trading partners meet the same national security standards we set for ourselves and keep malign foreign investments out of America’s backyard."
Schneider added, "By guarding against national security threats posed by foreign investments, strengthening an alignment between the U.S., Canada, and Mexico, the [bill] will ensure stronger protections for American workers, consumers, and small businesses."
U.S. Trade Representative Jamieson Greer has said he doesn't want China free-riding on USMCA, but it's not clear whether he was solely focused on Chinese inputs in Mexican or Canadian manufactured goods or whether he also wants to restrict Chinese-headquartered companies operating in North America (see 2502060049 and 2505190051).