---
title: China Lingers in the Background of USMCA
date: 2018-10-09T09:45:08-04:00
author: Import Bot
canonical_url: "https://www.kelleydrye.com/viewpoints/blogs/trade-and-manufacturing-monitor/china-lingers-in-the-background-of-usmca"
section: Blog Posts
---
# China Lingers in the Background of USMCA

  October 9, 2018

 

 

 

 

 

 

As we [previously reported](https://vault.netvoyage.com/neWeb2/searchRes.aspx?searchId=20181008073455https://www.ustrademonitor.com/2018/10/trilateral-trade-agreement-reached-with-heads-of-state-of-canada-mexico-and-us/), the United States, Canada, and Mexico have reached agreement on the United States-Mexico-Canada Agreement (“USMCA”) to replace the North American Free Trade Agreement (“NAFTA”), which has governed trade between the three countries since 1994. [Article 32.10](https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/32%20Exceptions%20and%20General%20Provisions.pdf) of the agreement requires each country to notify the others of any intention to negotiate a free trade agreement with a ​“non-market country.” The provision defines a ​“non-market country,” as any country that: (1) one or more USMCA member countries has determined to be a non-market economy for purposes of the USMCA member country’s trade remedy laws; and (2) none of the USMCA member countries has a free trade agreement with.

Last year, as a result of the expiration of certain language in China’s World Trade Organization (“WTO”) Protocol, the U.S. Department of Commerce conducted a review of its designation of China as a non-market economy country for purposes of the U.S. antidumping laws. The Department announced the results of its review of China’s status on [October 26, 2017](https://vault.netvoyage.com/neWeb2/searchRes.aspx?searchId=20181008073455https://www.ustrademonitor.com/2017/10/commerce-continues-chinas-status-as-a-non-market-economy/), concluding that China continued to be a non-market economy country. Further, none of the USMCA member countries have a free trade agreement with China. As a result, China would be considered a ​“non-market country” for purposes of the USMCA.

Article 32.10 requires a USMCA member country seeking to negotiate a free trade agreement with China, or any other ​“non-market country” to:

1. Inform the other member countries of their intention to negotiate such an agreement, at least three months prior to commencing negotiations;
2. Upon request of another USMCA member country, provide ​“as much information as possible” regarding the negotiating objectives; and
3. Provide the other USMCA member countries an opportunity to review the full text of the agreement at least 30 days before the date of signature.

Additionally, if a USMCA member country enters into a free trade agreement with a ​“non-market country,” the other two USMCA member countries are permitted to terminate the USMCA and replace it with a bilateral agreement.This provision, as well as a number of other provisions aimed at strengthening trade enforcement, including [Article 10](https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/10%20Trade%20Remedies.pdf), Section C, regarding the prevention of duty evasion of antidumping, countervailing, and safeguard duties, reflect the Trump administration’s strong stance against unfair trade practices by China.

 

 **Tags:** [China NME](https://www.kelleydrye.com/viewpoints/blogs/trade-and-manufacturing-monitor/tags/china-nme), [NAFTA](https://www.kelleydrye.com/viewpoints/blogs/trade-and-manufacturing-monitor/tags/nafta), [USCMA](https://www.kelleydrye.com/viewpoints/blogs/trade-and-manufacturing-monitor/tags/uscma)

 

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