<html><head><meta http-equiv="Content-Type" content="text/html charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" class=""><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><b class=""><span style="font-family: 'Times New Roman', serif; font-size: 12pt;" class="">Grassley: resolve 232 tariffs first, then address Democrats’ USMCA concerns</span></b></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Inside U.S. Trade</span><span style="font-family: 'Times New Roman', serif; font-size: 12pt;" class=""> </span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">03/06/2019<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Senate Finance Committee Chairman Chuck Grassley (R-IA) said on Tuesday that the removal of Section 232 tariffs on Canada and Mexico was the “first step” toward the passage of the U.S.-Mexico-Canada Agreement, after which some Democratic concerns about the deal's environmental and labor provisions would have to be “accommodated.”<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">The Trump administration last March imposed national security tariffs on steel and aluminum imports, prompting retaliatory tariffs from a host of U.S. trading partners, including Canada and Mexico. Canadian and Mexican officials have called the Section 232 tariffs a major obstacle in USMCA ratification and have demanded that the U.S. lift them before the deal is approved. Many U.S. lawmakers have also called on the administration to lift the tariffs.<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">“I think that taking the tariffs off -- or reaching a mutually agreeable settlement of the issue with Mexico or Canada -- is absolutely necessary as a first step,” Grassley told reporters. “As a second step -- and I haven’t talked to Democrats about this is any detail yet -- but they are raising concerns about environment, labor and enforcement.”<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Grassley said he was not “encouraging any of that now,” but given the makeup of the 116th Congress, he added, “it seems to me we have to in the real world consider doing some things in those areas” of concern for Democrats.<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Asked whether solving the tariffs issue should come before addressing Democratic concerns in the USMCA ratification process, Senate Finance Committee ranking member Ron Wyden (D-OR) told<i class=""> Inside U.S. Trade</i> “I will tell you that Democrats, regardless of their views on trade, believe enforcement has got to be at the center of any NAFTA 2.0.”<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Sen. John Cornyn (R-TX) told<i class=""> Inside U.S. Trade</i> that Section 232 tariffs on Canada and Mexico should be prioritized first, adding that he hoped the dispute “would be wrapped up as part of the negotiation, not just hanging out there as a separate item.”<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">“The tariffs are important to me as it relates to Canada and Mexico but it’s also important that we get the enforcement right on labor and environment,” said Sen. Debbie Stabenow (D-MI). “I think both should be addressed.”<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><b class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></b></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><b class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Grassley said he had yet to hold formal meetings with Democrats to discuss their concerns with USMCA,</span></b><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""> though he said he has conducted “general discussions. So I don't have any details at this point -- and we should be doing this -- but I think until the president is willing to send to the Hill the agreement, and there's some studies that they're wanting to complete ... before we have those discussions from what we do here.”<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">A USCMA implementing bill has not yet been sent to Congress. A report from the U.S. International Trade Commission on the economic impact of the deal is also in the works. The study was due to Congress on March 15, as required under Trade Promotion Authority law, but was delayed by 35 days due to the partial government shutdown earlier this </span><span style="font-family: 'Times New Roman', serif; font-size: 12pt;" class="">year.</span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Sen. Rob Portman (R-OH) told <i class="">Inside U.S. Trade</i> he did not believe the timing of the implementing bill's submission to Congress mattered in the context of Democratic concerns “because you can’t change the fundamental agreement once its signed. You can make side letters and you can do other things on the periphery but we should continue talking.”<br class=""><br class="">“My concern all along is here we have this agreement that seems to meet all the criteria that the Democrats have set out previously, and yet I haven’t seen a lot of public support from the Democrats,” Portman added. “USMCA is almost entirely changes to NAFTA that Democrats in the past have supported, including the environmental standards and the labor standards, which are new.”<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">U.S. Trade Representative Robert Lighthizer has maintained since the start of the NAFTA renegotiation process that a final deal would garner significant Democratic support. Few Democratic lawmakers, however, have to date committed to backing the deal.<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Grassley said that “in the meantime,” Mexican labor reforms “are going to make a big difference.” USMCA called for Mexico to pass labor reforms by Jan. 1, though that timeline has slipped.<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">“I believe that because of the very liberal nature of their new president, and he controls the Congress, that he would be inclined to do more for labor than what previous presidents of Mexico and the other two political parties were willing to do,” Grassley said. “In the process of doing this, it's necessary for Mexico to do this on their own because Mexico is not coming back to the table. There won't be any renegotiation.”<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Mexican Deputy Trade Minister Maria Luz de la Mora said on Monday that U.S. steel and aluminum tariffs must be lifted, and a Mexican labor reform bill must be passed by the country's Congress, before the Mexican government can submit a USMCA ratifying bill. She said she expected that to happen <a href="https://insidetrade.com/node/165977" style="color: rgb(149, 79, 114);" class=""><span style="color: blue;" class="">after Sept. 1</span></a>.<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""><br class=""></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class="">Canadian Ambassador to the U.S. David MacNaughton last month predicted the Section 232 dispute would be resolved “<a href="https://insidetrade.com/node/165909" style="color: rgb(149, 79, 114);" class=""><span style="color: blue;" class="">in a few weeks</span></a>,” citing Agriculture Secretary Sonny Purdue – who has called on President Trump to end the tariffs – as well as Grassley and “other eminent and important congressmen and senators” who have said retaliatory tariffs on U.S. goods “are having a very negative effect.” -- <i class="">Maria Curi </i>(<a href="mailto:mcuri@iwpnews.com" style="color: rgb(149, 79, 114);" class=""><span style="color: blue;" class="">mcuri@iwpnews.com</span></a>)<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: 'Times New Roman', serif;" class=""> </span></div></body></html>