Tech firms want Congress to pass U.S.-Mexico-Canada trade pact soon

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Eleven trade groups on Monday urged U.S. lawmakers to pass the U.S.-MexicoCanada trade agreement as soon as possible but warned Congress not to let the Trump administration change the thresholds for duty-free shipments into the United States.

The joint letter, signed by Internet Association, the Semiconductor Industry Association and other trade groups, said the new trilateral agreement would set global standards for access and usage of digital trade.

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The trade agreement, which leaders from the United States, Mexico and Canada signed in November, must be ratified by lawmakers in all three countries. Mexican lawmakers have already done so.

The Trump administration has been pressuring Congress to pass the trade deal, which will replace the North American Free Trade Agreement, but Democrats have balked at doing so until their concerns on labour, the environment, enforcement and pharmaceuticals have been addressed.

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Nine key House Democrats are expected to resume negotiations this week with U.S. Trade Representative Robert Lighthizer on proposed changes to the agreement.

The tech groups urged U.S. lawmakers to act swiftly to approve the trade deal but warned that using implementing language for the trade deal to change the de minimus threshold — the value below which imported goods are free of both sales tax and duties – would undermine the broader gains of the deal.

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As part of the USMCA, Canada and Mexico both raised their de minimis thresholds, aiding consumers and small businesses in the United States, but those levels will remain well below the U.S. level of $800, the highest in the world.

Some U.S. businesses have complained the U.S. level is too high and allows Chinese sellers an unfair pricing advantage on Amazon, eBay and other internet sites.

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Trade experts say a footnote in USMCA suggests Washington could lower its threshold to match what Canada or Mexico have agreed to.

The administration also suggested in a document sent to Congress on May 30 that it may seek changes to the U.S. de minimis threshold through the USMCA implementing bill.

“The current threshold was set by Congress and continues to benefit U.S. small businesses,” the tech groups said in their letter.

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© 2019 Reuters

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