Trade groups representing industries from retail and consumer brands to auto parts, textiles and apparel are urging the Trump administration to promptly renew the United States-Mexico-Canada Agreement and pursue sector-specific improvements.
Officials of numerous organizations testified at a U.S. Trade Representative hearing held Dec. 3-5 in Washington, D.C. The USTR also gathered public comment in preparation for next year's six-year review of the USMCA.
Trade associations are seeking industry-specific revisions to the trilateral agreement while still agreeing on several key priorities.
Most favored speedy renewal of the USMCA to ensure duty-free treatment of compliant goods. Many also favored expanding the list of levy-free goods to include items unavailable in the three countries. They further urged the three governments to better align their regulatory, legal and safety requirements, apply more uniform standards in reviewing and settling disputes, and follow clearer, more consistent due-process rules.
"Canada and Mexico are huge markets for American [consumer packaged goods], and the assurance of continued duty-free trade in USMCA-compliant goods and renewed trilateral partnership is critical to continued growth and success," Tom Madrecki, VP of supply chain at the Consumer Brands Association, said.
For the CPG industry specifically, Madrecki asked for more consistent and precise application of the rules of origin for substantially transformed products, such as cocoa and coffee.
For the auto sector, Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, called for simplifying rules of origin paperwork, clarifying EV-era definitions for key parts and labor value content, and allowing a transition period until North American battery and mineral capacity grows.
Other items on Volpe’s list included digital customs harmonization, faster dispute resolution and explicit recognition of tooling as regional value content.
"Finally, I want to state for the record: USMCA-compliant goods should not be subject to Section 232 tariffs," Volpe said. "They raise costs for U.S. manufacturers and weaken the integrated North American platform that makes U.S. automakers competitive globally."
Retail, apparel, textile industries’ wish list
Retailers want the next USMCA to recognize components from members of the Dominican Republic–Central America–United States Free Trade Agreement (CAFTA-DR) for origin purposes, Sung Chang, VP of international trade at the Retail Industry Leaders Association, said.
"We believe this could help near-shoring and friend-shoring efforts and speed up supply chain integration," Chang said.
Other issues to address include Mexico's lack of transparency and inconsistent enforcement of customs practices, Chang said. The Canada Border Services Agency's Assessment and Revenue Management system also needs improvement.
"We would support more trilateral cooperation on customs, including the creation of customs modernization programs," Chang said.
Katherine White, VP of policy at the National Council of Textile Organizations, urged the administration to extend duty exemptions to products originating in countries covered by CAFTA-DR, given the vital textile and apparel co-production relationship between the U.S. and countries covered under the pact.
Also, the NCTO seeks targeted reforms to the yarn-forward rule of origin to allow U.S. producers to obtain duty-free treatment when sourcing inputs not readily available within the bloc, such as acrylic, according to White. The yarn‑forward rule requires that the yarn used to make a textile or apparel product be formed in a USMCA country and that all subsequent production processes take place in one of the countries. However, fibers can be sourced from anywhere.
The group also calls for stronger enforcement to combat customs fraud and prevent third-party countries from siphoning off USMCA benefits.
"We suggest requiring Canada and Mexico to share trade data publicly to help efforts to identify fraudulent imports and to penalize repeat customs violators to the highest degree," White said. "U.S. Customs and Border Protection also needs to ramp up enforcement at home and to increase transparency and accountability in its enforcement activities."
Beth Hughes, VP of trade and customs policy for the American Apparel & Footwear Association, advocated integrating the USMCA with other Free Trade Agreement partners.
The integration would "create a virtual web among key U.S. trading partners without allowing textile, apparel, and footwear products using inputs from third countries to receive the benefits of the USMCA agreement,” Hughes said.
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