February 2020 Volume 2

WASHINGTON UPDATE

The new market access chapter will also prove beneficial to our industry. It maintains the current duty-free treatment regime for originating goods, while also ensuring the continued prohibition on export duties, taxes and other charges, as well as the waiver of specific customs processing fees. It adds new provisions for transparency in import licensing and export licensing procedures, which will be beneficial to help ensure foreign companies do not try and pass off as North American companies or try and pass off foreign-sourced materials as North American made products. And finally, it allows for the duty-free admission of goods to cover shipping containers and other substantial holders used in the shipment of goods, further aiding in our ability to price our products competitively. With just a few exceptions, nearly all of the companies represented by the Forging Industry Association are considered small to medium-sized businesses, or in business parlance: small- and medium-sized enterprises (SMEs). In 2016, 82,000 U.S. SMEs exported $51.2 billion in goods to Canada, while 53,000 U.S. SMEs exported $76.2 billion in goods to Mexico. Small- and medium sized businesses like many in the forging community really do drive the North American economy. Recognizing that, for the first time in a U.S. trade agreement, the USMCA has a chapter dedicated to SMEs, which includes key provisions that allow them to compete on a level playing field with large corporations. Some of the provisions specifically targeted to help SMEs take advantage of USMCA’s benefits and reduce costs include: • creating a new informal shipment level of $2,500 to help reduce paperwork; • establishing information sharing tools for SMEs so that they can better understand the USMCA and how to do business in the three countries;

• promoting policies that allow SMEs to participate in government procurement programs more easily; and • eliminating local presence requirements for cross-border service providers, ensuring our companies aren’t saddled with the unnecessary burden of opening a foreign office as a condition for doing business, among many others. Indeed, there is much to applaud in this new agreement. But most importantly, it now provides our industry with a stable North American trade regime that will allow us to do what we do best: forging unique and world class products. ■

Steve Haro is Principal at Mehlman Castagnetti Rosen & Thomas and can be reached at sharo@mc-dc.com

FIA MAGAZINE | FEBRUARY 2020 30