Trade Executives Agree on Need for NAFTA de Minimis Alignment, Not Level
Trade executives agreed during a Sept. 6 conference that better alignment of NAFTA de minimis levels could benefit commerce, but offered different opinions on the best path toward uniformity. Jon Kent, who lobbies for the National Customs Brokers & Forwarders Association of America (NCBFAA), said during the Air Cargo Industry Summit that there should be a “reconciliation” between de minimis thresholds in the U.S., Canada and Mexico but that the U.S. $800 level might not be the optimal benchmark. He suggested the Trump administration might even consider reducing the level to help close the gap between the U.S. standard and Canada’s $15 threshold and Mexico’s $50 benchmark. “You’re importing huge quantities of goods,” he said. “I don’t know how the administration can reconcile that big jump in imports with its own predispositions.”
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Canada and Mexico resisted an initial U.S. pitch for an $800 NAFTA-wide de minimis (see 1709010029). But a different de minimis proposal could always be introduced in later rounds, Kent said. Ottawa will host the third round of NAFTA talks Sept. 23-27. FedEx Express Legal Trade and International Affairs Managing Director Ralph Carter said his company has been making the case “quite well” to the Trump administration that getting Canada and Mexico to raise their de minimis levels “substantially” would stimulate U.S. exports and help tackle many administration trade concerns. “We hope that it is going to be a priority,” Carter said. “USTR said that it is, and we hope that it is at the end of the day.”
Kent rejected the notion that the de minimis increases would boost U.S. exports. He said that NCBFAA believes in aligning trade differences across NAFTA parties to ensure no uneven advantage, but added that he thinks de minimis has become a “free pass,” carrying reduced importer responsibilities and weakening the enforcement of U.S. laws. The NCBFAA in comments on NAFTA to the Office of the U.S. Trade Representative said it would like to see an alignment of U.S., Mexican and Canadian de minimises through talks, after the U.S. took the "unilateral gesture" of raising its de minimis from $200 to $800 through the Trade Facilitation and Trade Enforcement Act, resulting in reduced data and scrutiny for goods crossing into U.S. customs territory at a faster rate (see 1706140030).
During a separate panel, U.S. Chamber of Commerce Global Supply Chain and Trade Facilitation Executive Director Adam Salerno said he believes the U.S. was right in raising its de minimis, which is in line with inflation and e-commerce growth over the past 20 years. But he said the U.S. won’t get Canada and Mexico to sign on with its $800 level, particularly as living standards in Mexico are less advanced. But Canada’s current $15 de minimis, and Mexico’s current $50 de minimis “just doesn’t make a lot of sense,” he said. “We need to start looking at our export markets and say, ‘You should do the same thing, because it is a barrier to trade.’”